What's going on in your area?? any info???

Started July 7, 2013 at 05:11 pm by @Theresa Kolk in Tioga County, PA

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Theresa Kolk
07/07/13 05:11:18PM

Just curious...

I am in Liberty township and a few months ago got an offer to buy my royalties for 1500 to 1800 per acre, but they would do a more in-depth look if I was serious which "mite change the numbers" slightly....even tho I am not drilled or receiving any royalties..talked to a landsman rite b4 I contacted them and he advised caution as there will be "significant" activity in my area in the "near future"....how about it, anybody else get an offer or hear anything or see any activity here in Tioga Co. ?

Ann Ticopa
02/02/16 05:15:42PM @ann-ticopa:

I'm curious what plans Shell had/has for their Tioga County gas. They have contracts with (at least) two interstate pipelines, so getting gas out of the county is not an issue. But who were/are their intendded customers? Are there contracts that haven't been made public?

Certainly, Shell's purchase of B.G. indicates that they are betting big on global LNG. But I doubt TC gas is destined for China. Shell has committed to disposing of assets (and employees) as a term of the purchase. So they will have to "show their hand".

02/02/16 05:51:29PM @josie:

Hi Ann,

I have no idea. I have always assumed up until recently that PA gas would fuel major regions in the NE. But here is the main factor going on. The world economy is in a tail spin including the United States.

As reported in Bloomberg Today, the Fed is floating the idea of negative interest rates. If economies around the world were prospering, there would be no talk of negative rates.

The Fed Wants to Test How Banks Would Handle Negative Rates

  • Three-month Treasury bill rate falls to negative 0.5 percent
  • Very adverse scenario posits harsh worldwide recession

As interest rates turn negative around the world, the Federal Reserve is asking banks to consider the possibility of the same happening in the U.S.

In its annual stress test for 2016, the Fed said it will assess the resilience of big banks to a number of possible situations, including one where the rate on the three-month U.S. Treasury bill stays below zero for a prolonged period.

"The severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities," the central bank said in announcing the stress tests last week.

In that particular simulation, the unemployment rate doubles to 10 percent, the same level it reached in the aftermath of the last financial crisis.

Three-month bill rates have slipped slightly below zero several times in recent years, including in September after the Fed delayed rate liftoff amid global financial market turmoil, touching a low of minus 0.05 percent on Oct. 2.

But in thestress test, banks would have to handle three-month bill rates entering negative territory in the second quarter of 2016, and then falling to negative 0.5 percent and holding there through the first quarter of 2019.

Not a Forecast

"This scenario does not represent a forecast of the Federal Reserve," the central bank said. It also assumes "that the adjustment to negative short-term rates proceeds with no additional financial market disruptions."

Fed officials have made clear that they are a long way from contemplating a reduction in rates below zero in their benchmark overnight policy rate. Some, though, have suggested theyd be more open to such a move than in the past should the economy deteriorate significantly.

The central bank left its target range for the federal funds rate unchanged at 0.25 percent to 0.5 percent last week after raising it in December for the first time since 2006.

U.S. policy makers decided against pushing rates below zero during the financial crisis partly because of concern it could lead to dangerous dislocations in the money markets.

European Experience

Since then, the European Central Bank and the central banks of Switzerland, Sweden and Denmark have nudged some official lending rates negative without such repercussions, and Fed officials have publicly taken note.

The Bank of Japan became the latest monetary authority push rates into negative territory last week in an effort to spur lagging growth and increase too-low inflation.

Former Fed official Roberto Perli cautioned against drawing conclusions about future Fed actions from the inclusion of negative U.S. rates in the stress test scenario.

"It doesnt signal anything" about future monetary policy, said Perli, a partner at Cornerstone Macro LLC in Washington.

Nevertheless, it is "another sign that the Fed would not be entirely adverse" to reducing its target rate below zero should economic conditions warrant, he said.

Bill Dudley

New York Fed President William Dudley said last month that policy makers were "not thinking at all seriously of moving to negative interest rates.

"But I suppose if the economy were to unexpectedly weaken dramatically, and we decided that we needed to use a full array of monetary policy tools to provide stimulus, its something that we would contemplate as a potential action," he said on Jan. 15.

Fed Vice Chairman Stanley Fischer said Monday that foreign central banks that had resorted to negative interest rates to stimulate their economies had been more successful than he anticipated.

Its working more than I can say I expected in 2012, he told the Council on Foreign Relations in New York. "Everybody is looking at how this works," he added.


In another related article from the Associated Press....


FRANKFURT, Germany (AP) -- Swiss bank UBS saw its shares slide on Tuesday on news that investors had pulled billions out of its division serving wealthy clients - a token of the market turbulence that has shaken the world in the past few months.

The Zurich-based bank, which nevertheless booked higher fourth quarter profits, cited "very low levels of client activity and pronounced risk aversion" as it reported 3.4 billion Swiss francs ($3.3 billion) had flowed out of its wealth management arm, which handles money from rich people outside the U.S.

Fourth-quarter outflows from clients in emerging markets and in Europe outweighed inflows in the Asia Pacific region and Switzerland.

Shares in UBS Group AG were down 7.8 percent at 15.37 Swiss francs in midday trading in Europe.

The share drop came despite a 10 percent rise in net profit in the October-December quarter, to 949 million francs from 858 million francs in the same period a year earlier. The result beat estimates for 867 million francs compiled by financial information provider FactSet.

Markets for everything from stocks to oil have been marked by turmoil over fears that China will not be able to support global growth as before, that emerging markets face troubles with debt and capital outflows and that low oil prices mean weakening demand in the economy.

The company's U.S.-only wealth management division, however, saw strong inflows, with $16.8 billion in net new money. The U.S. business was helped by money being brought in by newly-recruited financial advisors, the company said.

Net profit was boosted by 715 million francs from the company's annual revaluation of deferred tax assets. It was reduced by 257 million francs from buying back some of the company's debt, and by 441 million francs in restructuring charges.

The bank recorded what CEO Sergio Ermotti called "an excellent year" for all of 2015, as net profit rose 79 percent to 6.2 billion francs, boosted by the performance of the wealth management division.

The bank said management would propose a dividend of 0.85 francs for the year, up from 0.75 francs from 2014.


It may not matter what contacts Shell has.

Christopher Meehan
02/02/16 07:01:52PM @christopher-meehan:

How far does your property have to be from the well head to be put into a unit?

Thomas Lilli
02/02/16 07:59:57PM @thomas-lilli:
I think they draw up units and then decide where to put the well pad.
02/03/16 03:37:17AM @paleface:

Utica well is 330ft. to the down hole.

Christopher Meehan
02/03/16 08:51:16AM @christopher-meehan:


Christopher Meehan
02/03/16 08:51:46AM @christopher-meehan:

Thanks Tom!

Ann Ticopa
02/04/16 01:41:04PM @ann-ticopa:
"Shell prepares to remake itself into gas giant after BG Group dealShell will cut its [2016] budget, which will be combined with BG Groups, by $3 billion to $33 billion down by about 45 percent since 2013. Only $3 billion of that total will be spent on high-cost U.S. shale production and heavy oil projects in Canada and elsewhere.Shell will also cut $3 billion in operating costs and 2,800 jobs this year after the merger, and its planning to sell $30 billion over the next two years. ..."http://fuelfix.com/blog/2016/02/04/shell-profits-fall-56-percent-amid-oil-downturn/#34195101=0
02/04/16 01:56:34PM @josie:

"Shell prepares to remake itself into gas giant after BG Group deal"

By making themselves into a "gas giant" doesn't mean Tioga County will benefit or play a big role in that. Shell is doing gas everywhere. The best markets for gas may not be in the United States. The environmentalists will be a constant threat here and that is not the way it is in Asia & Africa for example.

Ann Ticopa
02/04/16 03:34:16PM @ann-ticopa:
Anyone really really believe that the current slowdown was/is due to the actions of environmentalist ... rather than due to the o/g industry's overestimation of the market for natural gas? I'd describe "environmentalists" as a nuisance to the industry, rather than as an actual "threat"."Dutch appeals court says Shell may be held liable for oil spills in Nigeria"http://www.theguardian.com/global-development/2015/dec/18/dutch-appeals-court-shell-oil-spills-nigeria
Thomas Lilli
02/04/16 03:56:03PM @thomas-lilli:
Depends on the political winds too. But I agree with you the over production combined with the slow down in demand from China has done much to improve the lives of average Americans while damaging the O&G industry, a major bellwether in the recession recovery.Isn't it odd how our government has vilified the petro chemical industry when it was driving the recovery and now that it's in the tank, I'm hearing rumors of government aid.
02/04/16 05:46:24PM @josie:

I didn't say the current slowdown was due toenvironmentalist so please don't make it sound like I did. And who is it that is in the forefront of stopping every major oil and NG pipeline proposed everywhere in the Country?

The environmental community in general are the folks driving the man made global warming movement that very well may be the most outrages fraud ever put forth............that is a major threat to all of us.


Ann Ticopa
02/04/16 08:06:59PM @ann-ticopa:

Josie, I took what you wrote - "The environmentalists will be a constant threat here ..." as having a basis in fact. That is, it had already happened and continues to be a "threat". My mistake.

I don't *know*, but my guess is that the primary objectors to pipelines are the property owners who will be impacted. Some for financial and/or some for environmental reasons.

NG is promoted as a relatively clean transition fuel. What would be the point of switching to it if climate change is a "fraud"?

02/04/16 08:27:31PM @josie:

Here you go again.....if you are opposed to new Natural Gas pipeline construction then come right out and say it............Ann. I am not going to argue with you about it.

Example: How big a role did environmentalistsplay in Keystone?After Keystone victory, environmentalists pushing Obama on Atlantic drilling

All through New England and New York state ----

Google --new natural gas pipelines proposed

Read about who supports and who opposes.....

See ya!

Ann Ticopa
02/04/16 11:35:49PM @ann-ticopa:

What you asked was "And who is it that is in the forefront of stopping every major oil and NG pipeline proposed everywhere in the Country?" My personal opinion has no bearing on FERC's pipeline decisions. There is nothing to argue about.

To find the status of interstate gas pipeline applications, use FERC's "Major Pipeline Projects Pending (Onshore)"

Scrolling down the 2015 list, I came across the TGP Susquehanna West Project. From the project Fact Sheet: "The project would provide 145,000 dekatherms
of additional capacity for one customer. The project, in Tioga County, includes approximately 8.2 miles of new 36-inch pipeline looping on the TGP Line 300 system. - Complete Construction October 2017"

Ann Ticopa
02/05/16 08:20:57PM @ann-ticopa:

Map showing the location of the Susquehanna West gas pipeline expansions.


02/07/16 10:16:24AM @tim17:

nice map,


Ann Ticopa
02/07/16 03:06:51PM @ann-ticopa:

Here is a map of TGP's proposed Northeast Energy Direct (NED) project. Note Station 315 (near Wellsbor) on the esisting 300 line.

Map of the Empire Pipeline, includine Tioga County Extension. This is a 24" pipeline, owned by National Fuel Gas. Shell and Talisman (Repsol) are subscribers; connectors at state line in Jackson Twp.

Ann Ticopa
02/12/16 10:02:03PM @ann-ticopa:
HEP obtaining permits for SWN Tioga County gathering system."Howard Energy Partners Expands Into Marcellus Shale ...Howard Midstream Energy Partners, LLC dba Howard Energy Partners (HEP) today announced that it has executed a definitive purchase and sale agreement with Southwestern Energy Company (NYSE: SWN) to purchase the companys northeast Pennsylvania natural gas gathering assets in Bradford and Lycoming counties ...In addition to the existing systems, HEP plans to design, construct and operate a new natural gas gathering system for SWN in Tioga County, Pennsylvania. Once fully operational, the new system is expected to add up to 380 million cubic feet per day of capacity in the area. ... (March 2015)http://www.howardenergypartners.com/news/howard-energy-partners-expands-into-marcellus-shale-with-acquisition-of-pipeline-system-in-------------Water Obstruction and Encroachment permit - PA Bulletin"E5929-051: HEP Tioga Gathering, LLC; 512 Towne Plaza, Suite 120 Route 6, Tunkhannock, PA 18657, Liberty and Morris Township, Tioga County, ACOE Baltimore District.To construct, operate, and maintain:1)a temporary road crossing using timber mats impacting 705 square feet of an exceptional value palustrine emergent (EV-PEM) wetland (Nauvoo, PA Quadrangle 4135`32"N, 7713`51"W);2)A 20 inch diameter steel gas pipeline, a 16 inch diameter HDPE water pipeline, and a temporary road crossing using timber mats impacting 5,870 square feet of an exceptional value palustrine emergent (EV-PEM) wetland and 1,732 square feet of an exceptional value palustrine forested (EV-PFO) wetland (Nauvoo, PA Quadrangle 4135`38"N, 7713`42"W); ..."http://www.pabulletin.com/secure/data/vol46/46-6/197b.html--------------Erosion and Sdiment permit - DEP EFacts[Note: Some of the links in this PADEP reord return "No records matched the criteria." So, some of the information is unavailable.]TIOGA SOUTH TRUNKLINE OG ESCGP - HEP TIOGA GATHERING LLChttp://www.ahs.dep.pa.gov/eFACTSWeb/searchResults_singleAuth.aspx?AuthID=1104278
Ann Ticopa
02/15/16 09:04:23AM @ann-ticopa:
Note: This is a reply to Paleface's post , but can't get that "Reply" to activate.Which merger is going to get most of Shell's attention this year. They have put off their decision on the LNG facility in British Columbia on hold. And the longer they put off their decision on the ethane cracker, the more ethane pipelies are proposed/built to take ethane out of the area. I just don't see SWEPI as dominant as they were in TC. There are also Repsol (Talisman), SWN, Seneca, and Travis Peak.
Ann Ticopa
02/15/16 09:06:19AM @ann-ticopa:
Note: This is a reply to Paleface's post , but can't get that "Reply" to activate.Which merger is going to get most of Shell's attention this year. They have put off their decision on the LNG facility in British Columbia on hold. And the longer they put off their decision on the ethane cracker, the more ethane pipelies are proposed/built to take ethane out of the area. I just don't see SWEPI as dominant as they were in TC. There are also Repsol (Talisman), SWN, Seneca, and Travis Peak...
02/15/16 07:06:47PM @josie:

Hey, Any way you can copy and paste the whole story.....I can only read the 1st 4 lines of the article. Thanks

Ann Ticopa
02/15/16 07:32:58PM @ann-ticopa:

Afaik that's still correct ... that the merged company would be #1.

02/15/16 10:01:01PM @paleface:

Google Shell BG Wallstreet Jornal.

Ann Ticopa
02/20/16 07:34:46AM @ann-ticopa:

SWEPI O/G Leases of "Publicly-Owned Streambeds" in Tioga County
[Note: These leases are administered by the DCNR. In the one lease I downloaded, the term is 5 years and the royalty is $0.35/Mcf or 20% of fmv, whichever is greater.]

M-2102010-16 Cowanesque River - 21 miles - 115 acres - January 09, 2015, $460,000.00

M-2102015-16 Tioga River (Covington & Richmond Townships, Mansfield Boro) - 8 miles - 39 acres - January 09, 2015 - $156,000.00

M-2102013-16 Marsh Creek (Delmar, Shippen and Wellsboro Townships) - 27 miles - 62 acres - January 09, 2015 - $248,000.00

M-2102012-16 Elkhorn Creek (Farmington and Tioga Townships) - 6 miles - 8 acres - January 09, 2015 - $32,000.00

M-2102011-16 Crooked Creek (Chatham and Middlebury Townships) - 21 miles - 44 acres - January 09, 2015 - $176,000.00

Ann Ticopa
02/20/16 09:18:02AM @ann-ticopa:

Travis Peak O/G Leases of "Publicly-Owned Streambeds" in Tioga County

M-2102028-16 Cowanesque River (near Westfield) - 0.77 miles - 6.1 acres - January 04, 2016, $24,400.00
[see aerial photo of site on p21]

Brian Day
02/20/16 10:22:45AM @brian-day:

I will repeat a comment made in a much earlier discussion about the state claiming public domain over stream beds for the purposes of extracting leasing rights. If the state claims ownership of this land, perhaps they should refund the real estate taxes paid by the families who previouslythought that they owned this land, all of the way back to the beginning of when those taxes were collected, plus the costs of any maintenance costs of bank and streambeds incurred by those families over the years, before the state may claim such ownership and offer it up for leasing. if the initial cost of this reimbursement is too high for a one-time payment, then the state may surrender all leasing and royalty payments until to the landowners until the debt is satisfied. then the state may assume all ownership, responsibility, and liability for damages to he adjoining acreages for the future. the twenty percent which the state is receiving does set a very nice benchmark and precedent for all future lease negotiations.

02/21/16 06:46:47AM @paleface:

Hi Brian,I think I read somewhere it has to be a navigable waterway.It would be informative to see the qualifications for this.

Ann Ticopa
02/21/16 08:19:25AM @ann-ticopa:

PA Fiah & Boat: "Public Rights in Pennsylvania Waters"

Brian Day
02/21/16 09:59:21AM @brian-day:

After reading your post Ann, I see two points of interest. First, I confess to not having researched the origins of this new development, but I don't see where the courts made any new determination over what specifically is navigable water in any particular locale. It appears that the state just declared some waters navigable on ancient historical fact or at their convenience. Secondly, waters that were navigable with a canoe 200 years ago because mature forests retained ground water throughout the year in the watershed, are no longer even close to navigable. I can attest to this, having taken a very small canoe from Keeneyville down to the Hammond Lake as a young, bored, and foolish man. I carried that damn boat a whole lot of the time and it wasn't in near as good of condition when I started. also, I contend again,if a land owner and his/her family have been paying taxes on the acreage for years as if the land were a blanket without the stream existing in its midst, then the state should reimburse them for the excess taxes conveniently paid by mistake. After the mistake is corrected, then the state may indeed claim ownership od said stream bed.

Brian Day
02/21/16 10:04:21AM @brian-day:

I am making this reply in two entries because my computer is giving me fits.

This issue seems like a matter for a class action suite perhaps. if any attorneys read this site, I would think dollar signs would appear in their eyes. But first, it seems people should be ringing the phones of their various state representatives off of the wall concerning what appears to be some kind of concocted land grab without any kind of judicial process or legislative exploration.

02/21/16 11:12:24AM @paleface:

The word( ORDINARY )high and low water mark is crucial for the land owner.If the state claimed high water mark that could be 100 year flood high water mark. The state gave us a break there.

02/21/16 01:38:43PM @josie:


Public Rights in Pennsylvania Waters

Are Pennsylvanias waters considered public and therefore open to legal fishing and boating?

Some are; some arent. In addition to the legal status of the waterway itself, the status of the adjacent - or riparian - lands play a significant role in determining who has what rights. Unfortunately, a brief answer cannot comprehensively address this complex subject, which has generated major court decisions and lengthy law review articles.

So which waters are considered to be public?

Public waters include the great or principal rivers of the Commonwealth. The Pennsylvania Supreme Court inShrunk v. Schuylkill Navigation Companyin 1826 defined the great rivers to be the Ohio, Monongahela, Youghiogheny, Allegheny, Susquehanna, and its north and west, branches, Juniata, Schuylkill, Lehigh and Delaware. Public waters also include legally navigable rivers, streams and lakes.

What makes a river, stream or lake navigable for legal purposes?

Waterways must be regarded as navigable in law if they are navigable in fact. According to the United States Supreme Court inThe Daniel Ballin 1870, waterways are navigable in fact when they are used or are susceptible of being used in their ordinary condition as highways for commerce over which trade and travel are or may be conducted in customary modes of trade and travel on water.

Does that mean that a waterway must currently be used for commercial purposes in order to be navigable?

No. The test for navigability is not a contemporary test. Its a historic test that goes back to when William Penn was granted charter to Pennsylvania. Pennsylvania courts place particularly emphasis on a waterways use during the late 18th and early 19th centuries prior to the invention of modern modes of transportation and at a time when the only significant routes of travel, trade and commerce were on waterways.

What if a water that was used for commerce during the late 18th and early 19th centuries is no longer used for commercial purposes today?

It doesnt matter. The test of navigability is rooted in its historical use.

Does significant recreational use make a waterway navigable?

No. Only commercial use is considered by the courts.

Does the Fish and Boat Commission determine which waters are navigable and therefore public?

No. Only a court can decide. No agency, including the Fish and Boat Commission, is authorized to determine navigability by administrative action.

Who owns public waters?

The title to the beds of public waters is held in trust by the Commonwealth of Pennsylvania for the benefit of the public. In case of rivers and streams, the Commonwealths ownership extends to ordinary low water mark, and the adjacent riparian landowner owns above the high water mark. An easement exists in favor of public between high and low water marks. That easement includes the right to fish. In case of lakes, Commonwealths ownership encompasses the mean pool of lake.

How much of a navigable waterway does the Commonwealth own?

When it comes to navigable waters, Pennsylvania courts have said that the Commonwealths ownership extends to the ordinary low water mark, and the adjacent riparian landowner owns above the ordinary high water mark. An easement exists in favor of public between the high and low water marks. That easement includes the right to fish.

The courts have defined the low water mark in this context as the height of water at ordinary stages of low water unaffected by drought and unchanged by artificial means. The best advice is to tell the public to stay as close to the water as possible or if they want to be safe to stay in the water. If they dont venture on to upland properties, theyll be OK. The fact that a waterway is deemed navigable does not give the public unfettered access to people's riparian lands nor permission to trespass in order to gain access to a waterway.

What rights does the public have in public waters?

The rights of the public in public waters are quite broad and extend to fishing, boating, wading, floating, swimming and otherwise recreating.

Do the rights of the public include being able to cross private property to gain access to the public waters?

No. The public does not have a right to cross on private property to gain access to public waters. However, if you enter a public waterway lawfully (e.g., through a public access point), you can wade, boat, float or otherwise be in the waterway where it passes through private property.

Can riparian landowners prevent members of the public from floating or wading in public waters that flow through their property?

No. However, a riparian landowner can prevent the public from crossing his or her land to get to the public water.

Can riparian landowners prevent members of the public from fishing in public waters that flow through their property?No.

Is there a list of public waters?Unfortunately, no.

What waters are considered to be private?Private waters are non-navigable rivers, streams and lakes.

Who owns private waters?Title to the beds is held by the adjacent riparian landowner. If the adjacent riparian landowner owns property on only one side of a non-navigable waterway, he or she owns to the middle. When a non-navigable waterway flows through someones property, he or she owns the entire bed of the waterway.

Can a riparian landowner prevent members of the public from fishing or wading in a non-navigable water?Yes.

Can a riparian landowner prevent the public from boating or floating in a non-navigable water?No, because theres a navigation servitude that gives the public the right to use the water for purposes of navigation only. This servitude does not extend to fishing.

Can a riparian landowner string a cable across a non-navigable waterway?Yes, as long as:

  1. the landowner owns property on both sides of the stream; and
  2. the cable doesnt interfere with navigation.

However, from a liability perspective, it may not be a good idea.

Ann Ticopa
02/21/16 02:29:44PM @ann-ticopa:


Let's see ... the DCNR gets a $4000/acre bonus for 5 year paid up-leases. The DCNR land (or other state/federal property) can't be taxed by school districts. But the state does pay a $3.60/acre/yr PiLT. So even if a court decided the streambeds are classified as state-owned land, it would be a "moral" rather than financial victory.

You might be interested in reading about the struggle some landowners had regaining control (right of reversion) of land that had been abandoned by railroads.

Deb Reynolds
02/21/16 03:00:56PM @deb-reynolds:

that example is rather apples vs. oranges, Ann. The land we are discussing--private waters, defined as unnavigable--is privately owned, the state has no claim on it. The Rail-Trail controversy was based on the idea that the railroad maintained an interest in those properties because of prior leases.

This discussion is very interesting, keep us posted!

02/21/16 03:22:35PM @josie:

I have been told that when Swepi does their title searches that they go all the way back to the Grant before they enter into any agreement and before they pay out money. I am not saying that you guys don't have a valid argument, but what I am saying is that a huge company with many well informed attorney's on board are not likely to be making any errors. Not to mention all the attorney's on the state side.

Ann Ticopa
02/21/16 04:16:22PM @ann-ticopa:

I thought the rails-to-trails, etc, disputes might be something Brian would be interested in. Primarily for the court cases.

I believe this discussion was initiated by my post, "SWEPI O/G Leases of "Publicly-Owned Streambeds" in Tioga County" - which *is* land owned by the state.

Brian Day
02/21/16 04:56:37PM @brian-day:

I will read these posts Ann, thank you. Right this minute though, I'm not sure this relates perfectly because it is a surrendered right issue with lands owned previously by the railroad. I am not contesting that the state cannot actually lay claim to some of this stream bed land. "Render unto Ceaser what is Ceaser's" (Spell checker says I really slaughtered poor Ceaser again!") I am saying that refunds for taxes and repairs to the banks and beds funded by the uninformed land owners should be paid out before any lease can be written or royalties paid. also, any future taxes should be adjusted for the loss of acreage.

I am finding the bonus rate and the royalty rate paid to the state extremely interesting, considering the current economic climate for oil and gas.

Are there any land owners out there who know that their acreage will be impacted by this new arrangement with the state who wish tospeak up as to how they feel about the situation? Frankly, I don't think that I am affected at all by this situation. If I am, it will be on a small scale. I suppose a good captain could pilot a jet boat up Locey Creek from Keeneyville clear to the base of Butler Hill at high flood in the Spring. That would make the creek technically navigable. it would be a wild ride and I'd like to be there to watch.

Ann Ticopa
02/21/16 06:32:46PM @ann-ticopa:

Check r-to-t out if/when you want ... or not. There won't be a quiz.

The state does particularly well with the royalty on their leases. A recent PGC lease:
"The agreement involves the lease of the Game Commissions oil and gas rights under 5,870 acres of State Game Lands 12 and 36 in Overton and Elkland townships in Bradford and Sullivan counties. ... Chief Exploration and Development LLC of Dallas, Texas was the lone bidder, agreeing to pay a one-time bonus payment of $2,500 per acre for a five-year paid-up primary term, and 20.55 percent in royalties for all oil/gas and other liquids or condensates produced and sold from the proposed tract. Additionally, the bid provides the Game Commission a well-pad location fee of $75,000 per well pad ..."

02/28/16 11:22:47AM @josie:

Can someone tell me if this well is in Delmar Township, please. Thanks you

Authorization Search Details Search again
Authorization ID: 1109509
Permit number: 117-21848
Authorization type: Drill & Operate Well Permit
Application type: New
Authorization is for: FACILITY
Date received: 02/23/2016
Status: Pending

02/28/16 01:11:06PM @josie:

Thanks Ann

I am trying to watch for any news and info about the Utica Miller wells over by the wellsboro high school but those are Swepi I think.I would like to know what the results of the fracking is.

Ann Ticopa
02/28/16 05:08:08PM @ann-ticopa:

The well is: Miller 394 23H
Permit # 117-21755
Go to: "PA DEP Oil & Gas Reporting Website"
Select "Well Details" on left side of screen
Enter the Permit# for the well ... and wait ...
You will find that the well did produce for 8 days at the end of 2015.

02/28/16 05:18:51PM @josie:

Thank you a lot Ann, What is your opinion about the 8 day production compared to what you might know about other Utica wells in the area?

72,580.02 Mcf for 8 day

Ann Ticopa
02/28/16 06:07:12PM @ann-ticopa:

I don't know; I'm not in Utica territory. But do think it takes (at least) a couple months to predict how productive the well will be. Paleface seems to keep track of TC Utica well productivity.

02/28/16 06:42:00PM @josie:

Okay, thanks a lot for your help today.....

Ann Ticopa
02/29/16 07:55:05PM @ann-ticopa:

Josie, just discovered that there are two Delmar Miller wells that produced in 12/2015

117-21755 MILLER 394 23H SWEPI [72580.02 8]
117-21756 MILLER 394 25H SWEPI [87198.4 9]


02/29/16 07:57:00PM @josie:

Do you have the same link info for the 2nd one by any chance?

Ann Ticopa
02/29/16 08:23:40PM @ann-ticopa:

Same process as the first one, except use 117-21756 as the ID#.

02/29/16 08:36:17PM @josie:

Terrific..thanks a lot Ann....

If these two wells are Utica wells they did not get the hype of the other Utica wells that swepi has drilled in Tioga County....

Ann Ticopa
03/01/16 10:01:49AM @ann-ticopa:

Producing Utica wells in Tioga Cty, PA

This info is frrom (1) a PADEP Formation Report for Tioga Cty wells targeting the Utica Formation and (2) the PADEP Gas Production Report for Tioga Cty for December, 2015. Following are wells that produced in December, 2015:
[Quantity (Mcf) #Days]

Charleston Twp
117-21748 LOPATOFSKY 287 23H SWEPI [314878.63 31]
Chatham Twp
117-21530 NEAL D 815 1V SWEPI [75248.7 30]
117-21677 WATKINS 820 21H SWEPI [120462.27 29]
117-21676 WATKINS 820 23H SWEPI [86782.71 30]
117-21652 WATKINS 820 25H SWEPI [89035.52 29]
Clymer Twp
117-21659 SHARRETTS 805 23H SWEPI [98336.33 31]
Delmar Twp
117-21755 MILLER 394 23H SWEPI [72580.02 8]
117-21756 MILLER 394 25H SWEPI [87198.4 9]
Middlebury Twp
117-21724 CRUTTENDEN 846S 22H SWEPI [168468.11 23]
117-21725 CRUTTENDEN 846S 24H SWEPI [118263.3 23]
117-21538 GEE C 832 2V SWEPI [33414.04 30]
Osceola Twp
117-21670 SYNNESTVEDT 878 22H SWEPI [189985.83 31]
Rutland Twp
117-21760 KREITZER 505 21H SWEPI [118103.96 24]

Ann Ticopa
03/01/16 10:02:40AM @ann-ticopa:

03/01/16 10:10:44AM @josie:

Hi Ann, Very good report. Thank you so much for doing this for us....


03/02/16 12:11:46PM @josie:

Hey Ann, Once again, thank you very much for posting the Utica Wells data....I very much appreciate having it. Looks like the 2 Miller wells are good ones...first in Delmar Township...I hope Swepi moves forward with drilling the Utica well out by the airport

Take care Ann!

Jack Young
03/02/16 03:24:27PM @jack-young:

So far the reported production from the Miller wells has been somewhat disappointing, although it is still too early to be sure. You would expect more from the first 8 or 9 days of commercial production, but perhaps the wells weren't operating up to their full potential right away. Nobody can make money drilling even the best Utica wells at today's gasprices but at least there'shopefor the better parts of Tioga County. If/when prices climb again I'm sure the drilling rigs will return,

03/02/16 07:55:31PM @paleface:

The next Uticawells Shell drills in that area are going to be very interesting.To see which direction they target next.They could debunk the rumors for a fault line running through Wellsboro and turningnorth northeast.If they clearlydrill Utica wellson the eastor south of the supposedfault line and they show promising results it could be good news for people in eastern Tioga co.Its a shame the gas companys have that $1.74 elephant sitting on them.

03/02/16 07:59:10PM @josie:

There is a Utica well in permitting for out by the airport but I do not the name of it...supposed to be the next well drilled

What do you think about the Miller well numbers?

03/02/16 09:00:00PM @paleface:

It would be nice to have royalty's from that production.We have to watch to see if they can sustain.Where is the airport in relation to the Miller wells. N,S,E,W.

03/02/16 09:38:18PM @josie:

see attached -- this is a very rough idea.....Kennedy is right between them..almost in line.

03/03/16 11:20:20AM @josie:

Do you think the production numbers that are shown are from wells producing at full strength or are the wells cut way back?

Deb Reynolds
03/04/16 04:00:02PM @deb-reynolds:

I'd be interested in any speculation (even idle thought) on chances for Charleston Twp, south of Rt. 6. Especially near the Sevem, Hotchkiss, Fenton, etc.

03/08/16 09:47:07PM @josie:

How Hillary Clintons Ignorant War On Fracking Could Cost Her The Presidency

The FrackNation page temporarilysuspended by Facebookis back up and running.

This means that thanks to the Streisand Effect the anti-fracking activists who put pressure on Facebook to close it down have shot themselves in their sandalled feet. Suddenly the whole world knows about the Dimock water trial andwhat a huge setback it has been for the cause of anti-capitalist, enviro-Nazi lunacy.

Indeed, its possible that this once obscure trial may yet come to be recognised as the case that cost Hillary Clinton the presidential election.

To understand why you first need to appreciate what a hot-button issue fracking is with the liberal base.

Sen. Bernie Sanders (I-VT)
is flatagainst it. So she suddenly decidedat Flint, Michigan at the weekend isHillary.

Hillary Clinton, though, needed more time to outline three conditions in a more nuanced answer on fracking. Shes against it when any locality or any state is against it, when the release of methane or contamination of water is present, and unless we can require that anybody who fracks has to tell us exactly what chemicals they are using.

Until those conditions are met, weve got to regulate everything that is currently underway, and we have to have a system in place that prevents further fracking.

While this tough anti-fracking line might have played well with liberal activists, its unlikely to win widespread popular support when Clinton goes to the country.

First, it is increasingly obvious to anyone with half a brain that fracking has been good forthe US. It has taken petroleum production to its highest level since 1972 and not just reduced Americas dependence on Middle-Eastern Islamo-petro-tyrannies but actually turned her into a net exporter of crude oil and natural gas. Also despite the best efforts ofPresident Obama, who in 2009 said hewanted electricity rates to skyrocket it has provided the US with perhaps the most important of all ingredients for industrial growth and raised standards of living: cheap, abundant energy.

Secondly, it is also increasingly obvious that the claims made against fracking by activists like Josh Fox (of Gasland and Gasland 2 infamy), Mark Ruffalo and Yoko Ono just dont stand up. Especially they wont after this Dimock water trial which filmmaker Phelim McAleer has been covering on Facebook.

No one likes being lied to by a politician, even when in Hillary Clintons case the practise is so frequent it more or less coincides with every single moment her lips move.

If Hillary Clinton is going to campaign to close down Americas fracking industry on the basis of propagandistic nonsense from Josh Fox movies faucets spouting methane (which has nothing to do with fracking), water whose contamination turns out to exist entirely in the greedy imaginations of vexatious litigants trying to make easy money out of a blameless oil and gas company then its unlikely to impress fair-minded voters.

Especially not voters in blue-collar states which have tried fracking and come to enjoy its benefits. HenceGrover Norquistssuggestion earlier this week that Hillarys attack on the fracking industry may be her undoing.

Under her new rules, fracking would exist almost nowhere, the president and founder of Americans for Tax Reform told CNBCs Squawk on the Street. Democrats used to be able to insult the energy industry because they lived in Texas, Oklahoma, Louisiana and Alaska [and] they dont vote Democrat. But she declared war on Pennsylvania and Ohio with that statement. Thats not the way to win the election.

Maybe Hillary should check out thatFrackNation Facebook pageand keep herself abreast of the collapse in the anti-frackers case. It probably wont put her off her cunningplan to wipe out the US economy by promoting expensive, inefficient clean energy at the expense of cheap, abundant fossil fuels. But at least it might stop her sounding slightly less out of date and ill-informed next time she mouths off about release of methane and contamination of water.


03/10/16 04:10:22PM @josie:

$70 billion of defaults by energy and materials companies this year

Low oil price is throttling smaller energy players


Fitch Ratings is taking a far bleaker view of default risk in the energy and materials sectors than rival credit rating agencies.

Fitch said Thursday its raising its 2016 forecast for U.S. high-yield bond defaults to 6% from 4.5%, and said it expects energy and materials issuers to default on $70 billion of debt this year. The new rate of default is the highest that Fitch has ever forecast during a non-recessionary period, beating the 5.1% it forecast for 2000.

Moodys has similar albeit less-alarming concerns. The Fitch warning comes a day after Moodys updated its high-yield default forecast for the year to 4.7% from the 4% rate it predicted in a report out less than a month ago.

Dont miss:Corporate defaults expected to rise 30% in 2016, says Moodys

Read:Why we cant count on China to save the oil market

While crude oil prices have advanced more than $11 since their February 11 low, the bids on bonds of weaker [exploration & production] companies, in particular, have failed to gain much traction in the secondary market, Fitch said in a note. Currently $77 billion of energy bonds are bid below 50 cents.

There have already been nearly $18 billion of defaults in the energy and materials sector this year, including $13.7 billion worth from Pacific Exploration & ProductionPRE,-10.34%, SandRidge EnergySDOC,-16.84%, Arch CoalACIIQ,-6.37%and Energy XXLXL,-16.67%.

The energy sector accounts for 19% of the U.S. high-yield market, many of them shale plays that emerged during the fracking revolution. Many of those companies have been battered by the decline in oil prices to some 12-year lows below $30 a barrel before a recent, mild rebound. Per-barrel prices this low have made their businesses unprofitable. Energy consulting firm Rystad Energy says smaller players need a minimum $60-a-barrel oil price to make a profit.

Also read:U.S. shale-oil output is still increasing in the Permian Basin

A number of issuers, including SandRidge, Energy XXI and Chaparral Energy , have recently missed interest payments and their 30-day grace periods are due to expire later this month.

Read:Low oil price claims another victim Goodrich Petroleum to miss bond interest payment

Fitch is expecting the energy trailing 12-month default rate to end the year in a 30% to 35% range, while metals and mining is expected to climb to 20%. The coal sub-sector is expected to surge to 60%.

For now, the rest of the high-yield market is trending below average. The default rate excluding energy and materials is forecast to end the year between 1.5% and 2.0%, compared with Fitchs non-recessionary average of 2.2%.

The past six energy defaults have involved missed interest payments while a few outstanding distressed debt exchange offers (DDEs) are struggling in the market, perhaps signaling that smaller-scope DDEs are no longer able to buy companies time in the lower-for-longer oil price environment.


03/11/16 12:06:50PM @josie:

Canadian Prime Minister Joins Obamas War on Natural Gas

Yesterday, looking like a pimplyteenagerengaged in hero worship, Canadian Prime Minister Justin Trudeau joined President Obama in Washington, D.C. to declare hes willing to strangle the Canadian economy as much as Obama is willing to strangle our own economy. The DC confab was to announce new rules in Canada and here at home by the U.S. Environmental Protection Agency (EPA) that supposedly will cut down on fugitive methane leaking from oil and gas wells. The EPA, under the clueless and arrogant Gina McCarthy, will soon release new regulations (unlegislated laws) that require drillers and others in the industry to jump through new hoops to prove theyre capturing every last molecule of methane, i.e. natural gasand not letting any escape into the atmosphere where they claim it contributes to man-made global warming. Which is simply a ruse. They know global warming doesnt exist. This is a political ploy to grab more control over the governed, all in the name of saving them. God save us from politicians who want to save us! Below is the news of this latest bit of Kabuki theater, with reaction from radical environmentalists and from the drilling industry

First up is an overview of yesterdays choreographed show:

The EPA will limit methane emissions from existing oil and gas facilities a huge move by the federal agency, announced in conjunction with President Obamas meeting with Canadian Prime Minister Justin Trudeau on Thursday.

The new rule will help the two countries achieve their goal of cutting methane emissions from oil and gas by 40 to 45 percent below 2012 levels by 2025.

The two leaders regard the Paris Agreement as a turning point in global efforts to combat climate change and anchor economic growth in clean development, the White House said in a statement. They resolve that the United States and Canada must and will play a leadership role internationally in the low carbon global economy over the coming decades.

The EPA will start the formal process of developing the rule next month, while Canada expects to have a proposed rule in 2017. On a call with reporters Thursday, EPA Administrator Gina McCarthy said the agency will start work immediately. The first step will be requiring oil and gas companies to provide information on their methane emissions.

Its a really complex industry with hundreds of thousands of emissions sources, McCarthy said. When asked whether the new rule would be able to move forward before the end of Obamas term, she said the agency will do whatever we can to move forward in reductions of greenhouse gases from all sources.

Environmentalists have been calling for methane emissions reductions for years. A previously announced rule by the EPA covered only new oil and gas facilities this new addition will greatly increase expected reductions from the sector.

Without it, by 2018, almost 90 percent of the methane emissions from the U.S. oil and gas sector would have come from infrastructure built before 2011, the Environmental Defense Fund had estimated.

[The new rule] continues this countrys leadership in addressing climate in a meaningful way, McCarthy said.

The rise in fracking has dramatically increased methane emissions across the country. In fact, while natural gas is often touted as a clean energy source because it emits less carbon when burned than coal does, studies show that methane leaks have completely erased any climate benefit of transitioning to natural gas.(1)

From the always anti-drilling Candy Woodall at the HarrisburgPatriot-News:

The U.S. and Canada are targeting oil and gas wells in the latest pact to fight climate change.

Both countries will cut methane emissions from the industry by 40 to 45 percent during the next nine years.

President Barack Obama and Prime Minister Justin Trudeau on Thursday announced the joint effort, which is expected to affect hundreds of thousands of wells in the U.S.

The Obama administration has previously shared goals of cutting methane emissions more than 40 percent below 2012 levels by 2025.

But this is the first time the administration has focused on existing oil and gas wells.

In April, the U.S. Environmental Protection Agency is expected to release draft requirements that will cut methane emissions from oil and gas wells that havent been drilled and new regulations for existing wells.

Oil and gas companies will have to provide information about equipment and emissions-control techniques throughout production, transmission, processing and storage, EPA Administrator Gina McCarthy said Thursday.

The new regulations will be in accordance with the Clean Air Act.

Candas new rules will take effect early next year.

Pennsylvania is ahead of the curve on this one.

Gov. Tom Wolf and the state Department of Environmental Protection in January said they would issue new rules for methane emissions produced by Pennsylvania drillers to help the EPA fight climate change.(2)

You can read the joint statement from Obama and the man-child Trudeau here:U.S.-Canada Joint Statement on Climate, Energy, and Arctic Leadership.

What about reaction? The radicals at Earthworks are finally warming up (pun intended) to Obama. Hes becoming as radical as they are:

Statement of Lauren Pagel, Policy Director, Earthworks

With todays announcement, President Obama starts to get serious about oil and gas methane pollution.

Prior to this announcement, his Administration has largely focused on pollution from yet-to-be-built oil and gas facilities. This announcement is of enormous importance because it starts to deal with the main problem existing facilities.

This is great news for the climate. But its better news for the communities forced to live with the more than 1,000,000 active oil and gas facilities across the United States. Earthworks has documented more than 180 cases of oil and gas air pollution with an infrared camera specifically designed to detect this type of pollution.

No matter how stringent methane pollution controls are on new or existing facilities, you cant change science. Burning fossil fuels pollutes the climate. Thats why there is no substitute for replacing fossil fuels with truly clean alternatives like renewables and conservation.(3)

Used to be the Environmental Defense Fund (EDF) was the one group in the environmental movement that approached being reasonable. No more. Theyre now as radical as the rest:

Todays announcement of a joint climate strategy between the U.S. and Canada moves the world a step closer to a future safe from climate change.

The historic agreement addresses one of the most serious aspects of our climate crisis methane emissions from the oil and gas industry. Methane is responsible for about a quarter of todays warming, and the U.S. and Canada are the second and fourth largest emitters of oil and gas methane respectively. Today, Canada is pledging to reduce its oil and gas methane pollution by 40 to 45 percent over the next decade, matching an earlier U.S. commitment, and regulating new and existing oil and facilities. At the same time, the U.S. is committing for the first time to rapidly addressing methane emissions from existing oil-and gas facilities. Together, the new commitments demonstrate that these leaders recognize the urgent need for action to limit methane pollution. The issue is generating the global momentum it deserves. That means we can make enormous strides toward reducing levels of this potent greenhouse gas, helping to protect our planet and its people. I would like to thank President Obama and Prime Minister Trudeau for their leadership in tackling this critical problem.

Todays announcement demonstrates continued international cooperation and determination to address climate change. The U.S. and China announced a breakthrough climate agreement in November, 2014. Last year,195 countries approved an historic climate agreement in Paris. The U.S. finalized the Clean Power Plan to put the first-ever national limits on carbon pollution from power plants. And China committed to a national cap-and-trade program for carbon emissions beginning next year. Around the world, citizen and their leaders are calling for cleaner energy, healthier air, and more steps to protect us all from the dangers of climate change. Todays U.S.-Canada agreement is another welcome example of that international momentum.

In the U.S., EPA will soon finalize the first national scale limits on methane pollution from new oil and gas sources. Todays commitment to limit methane emissions from existing oil and gas sources goes much further, addressing the single largest industrial source of methane in the U.S. Cost-effective solutions are readily available, and are already being deployed in some states. I look forward to the day when national limits on methane from existing oil and gas sources are fully implemented. That will be the ultimate measure of progress.

Fred Krupp, president of Environmental Defense Fund(4)

The American Petroleum Institute (API), Independent Petroleum Association of America (IPAA), and National Association of Manufacturers (NAM) all sounded the alarm against this anti-capitalist power grab by Obama.

From the API:

President Obamas plans to add costly new regulations on methane when emissions are already falling could harm Americas shale energy revolution that has lowered energy costs for American consumers by $700 a year at the pump and $1200 in home utility bills, said API Vice President of Regulatory and Economic Policy Kyle Isakower.

Additional regulations on methane by the administration could discourage the shale energy revolution that has helped America lead the world in reducing emissions while significantly lowering the costs of energy to consumers. The administration is catering to environmental extremists at the expense of American consumers.

America is already leading the world in reducing greenhouse gas emissions. Even as oil and natural gas production has risen dramatically, methane emissions have fallen, thanks to industry leadership and investment in new technologies. These industry-led efforts are a proven way to reduce methane emissions from existing sources, and they are clearly working.

Lets not forget that the safe and responsible development of energy from shale has helped the U.S. cut CO2 emissions to near 20-year lows. The last thing we need is more duplicative and costly regulations that could increase the cost of energy for Americans and that could potentially drive up greenhouse gas emissions.(5)

From the IPAA:

Independent Petroleum Association of America (IPAA) Executive Vice President Lee Fuller released the following statement on the Obama Administrations plans to add costly and unnecessary new mandates on independent oil and natural gas producers:

This new, aggressive proposal threatens about 20 percent of Americas oil production and 13 percent of its natural gas production from Americas smallest oil and natural gas wells. These marginal wells are already barely economic, producing small volumes a day. Added costs can shut down these wells. And the result is lost jobs, higher fuel prices, less clean-burning natural gas and more reliance on foreign oil.

There is no concrete data that justifies the risks of shutting down significant amounts of American oil and natural gas production.

Every day, Americas oil and natural gas producers are working hard to develop Americas own abundant resources in a safe and environmentally sound manner. The federal governments own data confirms methane emissions have fallen in recent years and are continuing to drop, even as oil and natural gas production has risen. As technology has improved, the industrys processes have become more efficient. This proposal is designed to go after marginal wells and exceeds the administrations own voluntarily set climate targets, making this new federal mandate unnecessary from the start.

Methane emissions from oil and natural gas production-related activities only account for a little over one percent of total U.S. greenhouse gas emissions. Responsible energy development has and will continue to play a leading role in making the United States the world leader in greenhouse gas reductions.

Its clear this administration is kowtowing to environmental extremists whose only wish is to keep our nations affordable and abundant energy supplies away from those who need it the most by keeping it in the ground. With so many benefits from producing U.S. energy, a smarter national energy policy would encourage American oil and natural gas production, not penalize it.

IPAA addressed the costly impacts of targeting small producers by regulating existing sources in its December 2015 comments to the U.S. Environmental Protection Agency. IPAA President and CEO Barry Russell explained in an op-ed in The Hill that reducing methane emissions has long been an industry priority, which has often gone unrecognized.(6)

From NAM:

National Association of Manufacturers (NAM) Vice President of Energy and Resources Policy Ross Eisenberg issued the following statement after the Environmental Protection Agencys (EPA) announcement to regulate methane from existing oil and gas sources:

Manufacturers have reduced greenhouse gas emissions by 10 percent since 2005, while our value to the economy has increased by 19 percent over the same time period. Our ability to produce more and grow the economy while lowering emissions is dependent on access to reliable and affordable energy. The shale revolution has served as a major bright spot for manufacturers and has been a key driver in new investments across the country that have added hundreds of thousands of manufacturing jobs.

New technologies and efforts already being deployed are allowing for more oil and gas production with fewer emissions. Meanwhile, manufacturers continue to lead in developing new solutions that allow for greater energy efficiency and environmental sustainability. The NAM strongly urges the administration to avoid issuing any unnecessary or duplicative regulations that would limit manufacturers access to critical energy resources.(7)

Finally, U.S. Sen. Jim Inhofe (R-Okla.), chairman of the U.S. Senate Environment and Public Works (EPW) Committee, released the following statement after the Obama administration announced a pact with Trudeau to reduce methane emissions from new and existing sources:

The presidents latest announcement on methane emissions shows that his administration is grasping at straws as his Paris climate promise continues to fail and fall apart. Before the Supreme Court issued a stay on the Clean Power Plan, my committee was sounding the alarm that the president had not laid a clear path forward to successfully achieving his emissions reduction goals and that it would require even more harsh, costly regulatory action. This is why I am not in the least bit surprised by todays announcement. It is just another unnecessary move in a long line of punitive actions aimed at punishing the oil and gas industry. This is the same industry that has been one of the few sources of light driving the presidents anemic economic recovery despite his attempt to extinguish it. The Obama administration is going after a non-existent problem, but we shouldnt expect anything different from an administration whose stated goal was to crucify domestic energy producers.


Ann Ticopa
03/12/16 09:27:31AM @ann-ticopa:
"Shell names Lazard to advise on $30 billion asset sales" - 3/11/2016"Royal Dutch Shell has appointed investment bank Lazard to advise it on a $30 billion asset sale program following its acquisition of BG Group last month, several banking and industry sources said on Friday.The Anglo-Dutch company has also picked Bank of America Merrill Lynch and Morgan Stanley to work on proposed sales of assets, according to the sources, noting that more banks could yet be added to the line-up. ...Chief Executive Officer Ben van Beurden has said Shell's disposals would initially focus on the refining, storage and retail divisions, known as downstream, whose value has held up during the current downturn. ..."http://in.reuters.com/article/us-shell-m-a-lazard-idINKCN0WD169
03/13/16 10:39:54AM @paleface:

Shell is drilling L Gee's pad now.Threedeepwells in Middlebury Twp.

03/13/16 11:20:18AM @josie:

How many wells will that be at Gee?

03/13/16 12:56:19PM @paleface:

This is another Gee.These are the first three.Other Gee was Clarke Gee well pad,this is Lanny Gee pad.Both in Middlebury.Big family good people.

03/13/16 01:09:42PM @josie:

These are all newUticawells?

Is there a Marcellus Vertical well here too?

03/13/16 02:08:30PM @paleface:

As far as I know all Utica and deeper.

03/14/16 12:06:16PM @josie:

Time to Fire John Quigley Following Remarks to Marcellus Investors (Secretary of the Pennsylvania Dept. of Environmental Protection (DEP)

John Quigley should be firedimmediately. He is the Secretary of the Pennsylvania Dept. of Environmental Protection (DEP). Quigley previously worked for the anti-drilling PennFuture organization, an organization that seems to still havea big influence over him. On Friday, March 4, in his role as DEP Secretary, Quigley did intentional, massive damage to the states ability to attract new investment to the Marcellus industry. Quigley used calculated, disparaging comments about the industry during a call with Deutsche Bank Markets Research, broadcast to big money investors. He actually intended to, and did, talk down the industry and its prospects in Pennsylvaniameaning many investors decided to write PA off their list of places where they might want to invest. By all accounts, Quigley wants to discourage more investment in his states Marcellus industry. Although not criminal, it is unforgivable and he needs to be removed from officeNOW

Lots of eyebrows have been raised and more than a few remain arched high among those in the commonwealths shale gas industry over a conference call this month set up by Deutsche Bank Markets Research and the Pennsylvania Department of Environmental Protection.

The March 4 call, hosted by the banks Kristina Kazarian, and featuring state DEP Secretary John Quigley and his deputy, Scott Perry, covered what Ms. Kazarian billed as the continued Marcellus-Utica build-out and specifically Pennsylvanias role here.

No doubt, it was informative for anyone listening in. And, at least early on, Mr. Quigley did an even-handed job of billboarding Pennsylvanias energy charms. And an equally yeomans job was done by both Quigley and Mr. Perry in running down the on-the-ground industry statistics and detailing the environmental regulatory regimen. For potential investors, it sounded like an honest brokering of Pennsylvanias shale gas and oil landscape.

Until it was not and the just-the-facts, maam, recitation turned political not only a tacit discounting of the employment effects from the shale gas revolution but an open advocacy for an severance tax. One can only wonder how many potential investors crossed Pennsylvania off their list.

Shale-related employment is probably about half a percent, if that, of total employment in Pennsylvania, Quigley said. And the existing impact fee, which has generated something approaching $800 million in the past five years, was called anemic, producing a seemingly lamentable effective taxation rate on the industry of less than 1 percent to a highest estimate of 1.5 percent.

Were leaving a lot of money on the table, Quigley continued, the environmental protection guy shilling for a thorough plucking of the goose that lays the golden egg (but now far leaner because theres a glut of geese and a dearth of eggs).

Quigley called the fact that Pennsylvania doesnt have a severance tax mind-blowing. He pooh-poohed the suggestion that producers would go elsewhere should Gov. Tom Wolfs proposed 6.5 percent extraction tax win legislative approval.

That really doesnt pass the reality test, Quigley insisted. (Some producers still insist theyll do just that.) (T)here is no excuse for Pennsylvania not to have a severance tax, he reiterated.

To be fair, Quigley was asked by call host Kazarian to talk about the tax climate. And Quigley at least intimated that it would be more appropriate for the folks at the state Department of Community and Economic Development to address the severance tax and for the Department of Labor to talk jobs numbers.

Nonetheless, Quigley did talk about those topics and with great specificity and reasonable people could conclude, pejoratively. Its almost as if the benefits of the shale industry were being discounted to dissuade investment. Thats certainly not the proper role for government. And it only reinforces the notion, for some, that the Wolf administration, in this conference call, telegraphed that it really wants to kill Pennsylvanias burgeoning shale fortunes.*

*Pittsburgh (PA)Tribune-Review(Mar 12, 2016) Did a phone call telegraph the Wolf administrations real intent on shale gas?


03/21/16 07:39:29PM @josie:

Royal Dutch Shell --For the first time in its history, Iraq exports natural gas shipment

BAGHDAD-- Iraq on Sunday exported the first shipment of natural gas in its history, a key development for the OPEC member struggling to feed a cash-strapped economy amid an expensive fight against the Islamic State of Iraq and Syria (ISIS).

The move revives a long-sought ambition by Iraq to be a gas exporter, thanks to a joint venture with Anglo-Dutch Royal Dutch Shell PLC and Japan's Mitsubishi Corp. Iraq first planned to begin exporting gas in the late 1970s, but that timeline was delayed by the Iraq-Iran war when Iraqi export ports were bombed.

Jihad wouldn't reveal how much the cargo was worth or the buyer, but he added that the next cargo will be shipped by the end of this month.

In November 2011, Iraq signed a $17 billion deal to form a joint venture to gather, process and market gas from three oil fields in the oil-rich province of Basra. The fields are the 17.8 billion-barrel Rumaila, the 4.1 billion barrel Zubair field and the 8.6 billion barrel West Qurna Stage 1.

In the 25-year joint venture, called the Basra Gas Company, Iraq holds a 51-percent stake and Royal Dutch Shell has 44 percent, with the remaining 5 percent for Mitsubishi.

According the International Energy Agency, Iraq has estimated natural gas reserves of 112 trillion cubic meters, making it the 11th largest in the world.

The inauguration of Iraq's gas industry is meant to boost the coffers of a government badly in need of cash to fund ongoing military operations against ISIS, who control key areas of northern and western Iraq, including thesecond-largest city, Mosul.

Iraq holds the world's fourth largest oil reserves, some 143.1 billion barrels, and oil revenues make up nearly 95 percent of its budget.

Like other oil-reliant countries, Iraq's economy has been severely hit by plummeting oil prices since 2014, plunging the nation into an acute financial crisis despite record crude oil export levels. The crisis has forced Prime Minister Haidar al-Abadi's government to introduce austerity measures by eliminating government posts, merging some ministries, halting spending on construction projects and imposing new taxes to pay for civil servants and fund the military.

According to Oil Ministry figures, Iraq exported an average of 3.225 million barrels a day in February 2016, far below levels planned for this year's budget. Last month exports grossed about $2.2 billion, based on an average price of about $23 per barrel.

Iraq's 2016 budget is based on an expected price of $45 per barrel with a daily export capacity of 3.6 million. As a result, the nearly $89.7 billion budget has a deficit of over $20.5 billion. Officials plan to cover the shortfall with loans from local and international lenders.


Ann Ticopa
03/24/16 04:09:27PM @ann-ticopa:
"Australian Energy Giant Woodside Delays Large Offshore L.N.G. Project""Woodside Petroleum and its partners, including the energy giants Royal Dutch Shell and BP, have decided to delay indefinitely the development of a huge liquefied natural gas project off Western Australia, the company said on Wednesday. ...
With prices of oil and liquefied natural gas having plummeted, executives are scrambling to extricate themselves from potential white elephants that are still in the planning stages. ...
Mr. Coleman of Woodside said in his statement that the partners would be able to use the delay, which analysts say could last at least a decade, to work on lowering the costs [of floating L.N.G.]."

"Repsol scraps plans to convert Canaport LNG to export gas
Company failed to find outside investors in multibillion-dollar project"
""Due to the prices of natural gas, exporting LNG is not as lucrative at the moment," he [Energy and Mines Minister] said in a statement issued on Wednesday afternoon. ..."

[Note: Repsol is the company that bought Talisman, so the re-purposed facility had the potential of processing/exporting Northern Tier gas. ]

03/24/16 04:15:41PM @josie:

Thank you for posting this

Ann Ticopa
03/24/16 08:42:18PM @ann-ticopa:

I was surprised that Repsol had halted the export project; they had recently gotten their permits. The tactic of "importing" LNG to moderate New England cold weather price spikes - rather than increasing pipeline capacity - had been proposed before.

03/24/16 08:59:24PM @josie:

Seems like the whole industry is pulling back.....and in the long run that may drive price.

03/25/16 09:53:31PM @josie:

Rick Cleveland
04/01/16 08:46:29AM @rick-cleveland:

Anybody know what the activity is at the Williard Pad out in Stony Fork? I see the crews and man camps have been set up along with a rig.

Ann Ticopa
04/01/16 11:09:45AM @ann-ticopa:

From DEP Facts: There are recent permits for three Willard 419 wells, plus permits pending for the pipeline activity. From the (two-digit) numbering, it appears they are Utica wells.

WILLARD 419 ESCGP OG - Delmar Twp
117-21840 22H
117-21841 24H
117-21842 26H

Three water quality-type permits applied for 2/25/16

04/01/16 11:48:18AM @josie:

Hey Rick, Is there a drilling rig set up there?

I wonder if they are done drilling over at the Gee well in Middlebury

I was told that Swepi has only one rig in Tioga Co.

04/01/16 12:20:59PM @josie:

Top 10 ProducingShale Wells All Plays for 2015

Notice that 7 of the top 10 wells were in either the Marcellus or Utica. Also notice that EQTs monster well in Greene County, PA (a Utica well) was the #1 shale well, production wise, for the entire country in 2015.

Top 10 ProducingUtica Shale Wells for 2015

The #1 Utica well by production for 2015 was located in.Greene County, Pennsylvania! NOT in Ohio! The other 9 top 10 wells were all in Belmont County, in eastern Ohio. And Rice Energy had 7 of the top 10 Utica wells.

Top 10 ProducingMarcellus Shale Wells for 2015

8 of the top 10 are in Susquehanna County, PAin the northeastern corner of the state. The other 2 in the top 10 are in Washington County, PA, in the southwestern corner of the state. Also notice that Cabot Oil & Gas had 7 of the top 10 Marcellus wells (by production) in 2015.


Rick Cleveland
04/01/16 01:24:55PM @rick-cleveland:

It appears the current rig is a work-over rig. They are not drilling yet but there is a flurry of activity at the well site. I have property in the Fuelihan unit just down the road and have been keeping a watchful eye on Shell's Utica drilling activity. Definitely good news with any pipeline activity in this area.

Rick Cleveland
04/01/16 01:25:44PM @rick-cleveland:

Thanks Ann. I appreciate it.

04/02/16 12:06:58PM @paleface:

So far there is one rig.When its done at Lanny Gee's its headed to Willards.

04/02/16 12:09:15PM @josie:

What is a work-over rig?

Is Willard an older East Marcellus well being re-drilled deeper?

Is Willard a Production Unit?

Thanks Rick

04/02/16 12:11:08PM @josie:

Is Willard an older East Marcellus well being re-drilled deeper?

Is Willard a Production Unit?

Thanks paleface

Ann Ticopa
04/02/16 02:44:43PM @ann-ticopa:

WILLARD 419 ESCGP OG - 117-20365 - Well 1H - East Resources Inc.
SPUD 11/12/2009 - Current owner SWEPI, "Regulatory Inactive Status"

Note: A DEP SPUD Report shows that Willard 419 26H was SPUD on 3/15/16. However, setting a conductor pipe is sufficient to start the clock on the impact fee. Actual drilling of the well may not have started.

"Drill deeper" is something SWEPI applies for periodically. Don't know why.

04/02/16 06:04:50PM @josie:

Hi Ann, Is the "drill deeper" so they can extend the old well into the Utica?

Ann Ticopa
04/02/16 07:40:50PM @ann-ticopa:

I don't think that's it. SWEPI did "drill deeper" several years before they started doing Utica wells. Here are the coordinates for the four wells.

1H - 20365 41.694426/-77.360431
22H - 21840 41.694575/-77.360502
24H - 21841 41.694536/-77.360522
26H - 21842 41.694611/-77.360483

04/04/16 12:47:00PM @josie:

Opposition to Fracking Mounts in the U.S.


  • Opposition to fracking rises to 51% from 40% in 2015
  • Drop in fracking mirrors Americans' turn away from nuclear energy
  • Republicans fuel drop in support for fracking

WASHINGTON, D.C. -- Opposition to the practice of hydraulic fracturing or "fracking" has increased significantly in the past year as environmental concerns, such as earthquakes, have grown, even though the procedure has helped keep oil prices low.

Fracking in the United States
Do you favor or oppose hydraulic fracturing or "fracking" as a means of increasing the production of natural gas and oil in the U.S.?
Favor% Oppose% No opinion%
Mar 2-6, 2016 36 51 13
Mar 5-8, 2015 40 40 19

In the past year, the price of oil has fluctuated between roughly $25 and $60 per barrel, a staggering drop from its peak of around $120 in mid-2014. One major reason the price of this commodity has remained so low is fracking, which now accounts for half of the oil production in the U.S. As recently as 2000, fracking made up only 2% of the nation's oil output.

In Gallup's 2016 Environment survey, conducted March 2-6, Americans have a clearer position on fracking than they did a year ago. Last year, 40% said they favored fracking and 40% were opposed, with a substantial 19% not knowing about or having no opinion on fracking. In 2016, support for fracking has slipped to 36%, while opposition has climbed to 51%. The percentage of Americans with no opinion has dropped to 13%, perhaps as the term becomes more commonplace in the culture, or as the media has more extensively covered the arguments for and against fracking.

Americans' turn against fracking comes as the percentage predictingthere will be a critical energy shortagein the next five years has fallen to a new low, likely because of lower gas prices. With oil and gas relatively cheap, many Americans may not see the need to fracture the earth through fracking. Lower oil and gas prices may also be the reason a majority of Americans areopposed to nuclear energyfor the first time. Additionally, more people would liketo prioritize alternative energyover traditional energy sources. Fracking, while a relatively new way to extract oil, is still a means of harnessing fossil-fuel energy, helping explain why Americans may be growing averse to it.

Republicans Not as Supportive of Fracking in 2016

Republicans had the biggest drop in support for fracking, falling from 66% support in 2015 to 55% this year. Still, Republicans' support for fracking far exceeds support among independents (34%) and Democrats (25%). Views among the last two groups are essentially unchanged from last year.

Fracking in the United States
Americans in favor, by political party
2015% 2016%
Republican 66 55
Independent 35 34
Democrat 26 25
GALLUP, MARCH 2-6, 2016

Bottom Line

Fracking has become a contentious topic in American life. In recent years, it has been seen as a source of great prosperity for the nation's crude oil producers, yet it has also become part of a global tug of war with Saudi Arabia. The Middle Eastern oil behemoth has been engaged in a pricing battle with American oil companies, with its goal being lower prices to make the cost of fracking too expensive for U.S. companies to pursue.

Fracking is potentially a cause of earthquakes across sections of the U.S. that are not used to these types of natural disasters. The U.S. Geological Survey said this week that 7 million Americans are at risk of experiencing earthquakes caused by fracking in the states of Oklahoma, Kansas, Texas, Colorado, New Mexico and Arkansas. With more than 1,000 earthquakes in the central U.S. alone last year, these events could be linked to the rising percentage of Americans who oppose fracking.

For the foreseeable future, fracking appears to be a way to extract oil from shale. Oil producers nationwide have said that if oil prices remain above $40 per barrel, it is prudent to use fracking to drill for crude oil. Previously, producers had said that price needed to be $70. With the U.S. effectively swimming in shale oil, the deliberation over fracking will likely continue for years to come.

Historical data are available inGallup Analytics.

Survey Methods

Results for this Gallup poll are based on telephone interviews conducted March 2-6, 2016, with a random sample of 1,019 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. For results based on the total sample of national adults, the margin of sampling error is 4 percentage points at the 95% confidence level. All reported margins of sampling error include computed design effects for weighting.

Each sample of national adults includes a minimum quota of 60% cellphone respondents and 40% landline respondents, with additional minimum quotas by time zone within region. Landline and cellular telephone numbers are selected using random-digit-dial methods.

Rick Cleveland
04/04/16 01:46:48PM @rick-cleveland:

Josie, Workover rigs are typically used for various types of well interventions such as wireline or snubbing operations. Basically they are used when maintenance of some sort needs to be performed on an existing well that has already been drilled.

04/04/16 01:58:07PM @josie:

Thanks Rick

Deb Reynolds
04/06/16 09:33:18PM @deb-reynolds:

Lies, damn lies, and statistics. --Mark Twain (3 types of lies)

04/06/16 10:47:04PM @josie:

Well, here is some more:

Clinton may very well be the next president accoring to Wall Street


More than 70 percent of respondents to a recent Citigroup poll of institutional clients viewed the former secretary of state, first lady and New York senator as the likely 45th president. Just over 10 percent giveDonald Trumpthe nod, while fellow RepublicanJohn Kasichis a few points behind. DemocratBernie Sandersand RepublicanTed Cruzbarely register. (The poll was taken before Sanders and Cruz scored big primary wins Tuesday in Wisconsin.)

The online predictions markets, where traders can place their bets on politics and a host of other events, tell a similar story.

On PredictIt, Clinton traded early Wednesday at a price of 59 cents a share, which equates to the probability participants give her to be the ultimate winner. Trump is at 17 cents, Sanders at 16 cents and Cruz at 15 cents.

In the polling places and on the airwaves, there remains a high level of uncertainty about who will be the next U.S. president. Not so on Wall Street and the markets.

Recent indications from deep-pocketed institutional investors as well as those who frequent prediction markets sayHillary Clintonwill win. And it's not close.

More than 70 percent of respondents to a recent Citigroup poll of institutional clients viewed the former secretary of state, first lady and New York senator as the likely 45th president. Just over 10 percent giveDonald Trumpthe nod, while fellow RepublicanJohn Kasichis a few points behind. DemocratBernie Sandersand RepublicanTed Cruzbarely register. (The poll was taken before Sanders and Cruz scored big primary wins Tuesday in Wisconsin.)

The online predictions markets, where traders can place their bets on politics and a host of other events, tell a similar story.

On PredictIt, Clinton traded early Wednesday at a price of 59 cents a share, which equates to the probability participants give her to be the ultimate winner. Trump is at 17 cents, Sanders at 16 cents and Cruz at 15 cents.

"An awful lot of investors view her as the devil they know as opposed to the devil they don't know."-Greg Valliere, chief global strategist, Horizon Investments

While there's still plenty of time before the November election, markets are getting acclimated to the idea of a Clinton victory. Wall Street-related firms are Clinton's biggest contributor group, giving her just over $21 million of the total $159 million she has raised during her campaign, according to OpenSecrets.

"An awful lot of investors view her as the devil they know as opposed to the devil they don't know," said Greg Valliere, chief global strategist at Horizon Investments and widely recognized as one of the leading experts on how what happens in Washington affects Wall Street. "It's a true cliche: The market doesn't like uncertainty."

Wall Street places its bets

Wall St contributions ($M)
Total raised
Hillary Clinton 21.03 159.9
Ted Cruz 12.5 66.5
John Kasich 3.2 12.1
Donald Trump 0.024 34.7
Bernie Sanders 0 139.8
Source: OpenSecrets.org

Prospective voters have considerably less certainty about who will win the Oval Office.

The RealClear Politics average gives Clinton a decisive 10.8-point advantage over Trump in a head-to-head matchup, but just a 3.1-point edge over Cruz while Kasich actually beats her by 6.3 points. Interestingly, Sanders fares even better than Clinton against the GOP candidates, holding respective leads of 16 percent, 9.8 percent and 1.3 percent.

Though Trump got routed in Wisconsin, PredictIt traders still see him as the likely GOP nominee, putting his price at 44 cents to 33 cents for Cruz and 17 cents for House SpeakerPaul Ryan, who fares better than actual candidate Kasich, whose price is a paltry 8 cents. Clinton, who also lost badly in Wisconsin, still holds a commanding edge on the prediction market in terms of the Democratic nomination, with a price of 84 cents compared with Sanders' 17 cents.

Amid the horse race, markets have been fairly immune so far to the campaign's raucous climate. Though undergoing its own form of volatility, theS&P 500is about 9.5 percent higher than it was in August, around the time the campaign began in earnest. Pockets of the market have taken hits, but overall it has rebounded from each dip.

"There still are plenty of concerns out there with earnings topping the list and, maybe surprisingly to many, the upcoming U.S. elections thus far have had little impact on share prices," Citigroup said in a note accompanying its survey. "But, investors overwhelmingly see Hillary Clinton as the likely winner in November and this also may explain the disdain for the health care sector."

On an individual basis, Valliere said "there's so much uncertainty surrounding Trump a trade war with China. Does he get into a fight with the Fed? There are a lot of real anxieties."

"I don't think there's much anxiety over Kasich, but I just don't see the path for Kasich to be the nominee," he added. "Cruz is the only wild card. He can't win a victory (in terms of a delegate majority). The math doesn't add up. ... His views on the Fed (favoring an audit of the central bank) would be troubling, but at least there would be less uncertainty. Cruz pretty much what you see is what you get."

There's another battleground this year that is getting less attention than the presidential race: Congress. The Republicans hold majorities in the House and Senate, but the top of the ticket could add considerable weight to the legislative races.

As things stand in the head-to-head matches, a Trump nomination would pose the most danger to the GOP. Though still comfortably beating Cruz and Kasich in national popularity polls (40.4 percent to 32.8 percent and 20.6 percent currently in the RealClear Politics averages) Trump has been slipping in recent days.

"While Mr. Trump is still the front-runner for the Republican nomination, there is a growing possibility that other candidates (e.g. Sen. Cruz or Gov. Kasich) could be chosen," Goldman Sachs economist Alec Phillips said in a note to clients.

"This could change perceptions of the general election outcome," Phillips added. "The other Republican candidates still in the race perform better in polling against Sec. Clinton; Gov. Kasich, in particular, consistently leads such polls. A more competitive presidential election contest might also reduce expected Republican losses in Congress; without a heavily lopsided presidential race, Democrats would probably still be within reach of the Senate majority but would have a difficult time winning the House."

Republicans hold a 246-188 advantageover Democrats in the House and a 54-44 edge in the Senate, which also has two independents.

From a markets standpoint, Phillips believes there are multiple ramifications.

Trump, for instance, stands apart from his opponents in his staunch opposition to trade liberalization and drug company pricing practices. He also has been a less vocal supporter of entitlement reform.

Investors, though, seem to be spending more time figuring out what impact a Clinton victory will produce.

"The markets are going to be looking for signs of (Trump) mellowing. Does he turn down the bombast?" Valliere said. "But Hillary is still the favorite. ... I think the markets could live with her. That's a major reason why we haven't seen market instability right now."

Ann Ticopa
04/07/16 08:57:33AM @ann-ticopa:

But Jeb Bush was Wall Street's first choice.

Ann Ticopa
04/07/16 10:29:46AM @ann-ticopa:
"Kuwait inks contracts to import 2.5m tonnes of gas a yearKuwait City: Kuwaits state-run oil firm has signed contracts to import 2.5 million tonnes of liquefied natural gas a year through 2020 to meet the emirates needs ...Kuwait Petroleum Corp signed contracts with BP and Royal Dutch Shell to buy one million tonnes a year from each company ..."http://gulfnews.com/business/sectors/markets/kuwait-inks-contracts-to-import-2-5m-tonnes-of-gas-a-year-1.1706098
Ann Ticopa
04/11/16 10:08:13AM @ann-ticopa:
"Kinder Morgan Units Award EPC Contract to IHI E&C for Planned LNG Export Facility at Elba Island, Georgia""Kinder Morgan, Inc. (NYSE: KMI) and IHI E&C jointly announced today that Kinder Morgan subsidiaries, Elba Liquefaction Company, L.L.C. and Southern LNG Company, L.L.C., awarded to IHI E&C a contract for the engineering, procurement, construction, commissioning and startup of Kinder Morgans natural gas liquefaction project at Elba Island, near Savannah, Georgia. ...Shell is the customer for 100 percent of the liquefaction capacity and ship-loading services being developed by the project. When completed, the Elba Liquefaction Project will process and liquefy a total capacity of approximately 2.5 million tonnes per annum of LNG. ..."http://ir.kindermorgan.com/press-release/kinder-morgan-units-award-epc-contract-ihi-ec-planned-lng-export-facility-elba-island-
04/11/16 11:27:43AM @josie:

Some Utica Drillers Go Back to Wider Well Spacing New Trend?

HorizontalWellMDN spotted a fascinating story in NGIs Shale Daily publication about what may be a new trend developing in the Utica Shale. It all concerns interlateral well spacing. What the heck is that? When you drill a shale well, like a Utica well, you can drill down from a single location (i.e. well pad) multiple times and when you turn the drill bit horizontally, you drill an entirely new well. So each well pad contains, typically, anywhere from 2-12 underground wells. Each horizontal well underground is called a lateral. When you drill a lateral, you frack itusing small explosive charges to crack the rock apart near the lateral, injecting water with sand into the cracks. The water drains out, the sand remains propping open the cracks to allow natural gas (or oil, or NGLs) to drain out of the cracks, into the well and up the borehole to the surface. In the past few years most drillers have found putting the laterals about 750 feet apart keeps them far enough apart that the cracks from one well dont interfere with the cracks from another well (see image below). Ideally you want the laterals to be far enough away that they dont drain any gas from the next lateralbut close enough that youre not leaving undrained rock in between. That distance in the Marcellus/Utica seems to be around 750 feet. But Rice Energy and Gulfport Energy, two major players in the Utica, are moving back to 1,000 foot spacing between their laterals. Why?

Heres an image to help you visualize a bunch of laterals that have been fracked (the fuzzy/cloudy area around each one indicates tiny fractures all around it).


Click for larger version of image

In an effort to save money wherever possible, some operators in the Appalachian Basin are reverting back to wider interlateral well spacing, choosing, for now, to lose drilling locations and gain back capital as they search for more ways to weather the commodities downturn.

Its too early to say definitively whether the moves by Gulfport Energy Corp. and Rice Energy Inc. to shift from 750-foot spacing back to 1,000-foot spacing in the Utica Shale are the makings of a trend. But at the least, the decisions have revived a debate about reservoir management and optimal drainage in the Northeast amid a challenging price environment.

Only in recent years have operators focused sharply on squeezing more wells onto their shale acreage, boosting reserves, returns and in some cases production. They set out to more effectively drain their reservoirs without the old problem of interference. After mixed pilot tests, some companies began developing their acreage on tighter spacing.*

Why spaceout laterals again?

The widened Utica spacing is a function of two primary factors: lower gas prices and increased well productivity, said CEO Daniel J. Rice. From a returns and present value perspective, in this commodity price environment, well economics make more sense at spacing wider than 750 feet in order to maximize PV-10 field-wide.

The moves highlight the variety of completion methods in the play, too. Gulfport made a purely economic decision. It puts less energy into completing its wells. Rice typically completes with more frack stages, tighter frack clusters and more proppant. In any event, Topeka Capital Markets analyst Gabriele Sorbara said wider spacing for both companies is a prudent move in the current environment.*

So theyre doing it because with wider, spaced out laterals, you dont drill as many wellssaving money. Plus, you can move on and drill the wells you saved from drilling in one unit, to drilling a well in another unit. That is, if youve leased a bunch of acreage and dont have the money to drill on all of that acreage before the lease expires, by drilling laterals wider apart you can lock up more of the acreage youve leased with wells than you otherwise could have.

What does it mean for landowners? If the wider 1,000-foot spacing trend picks up, maybe more landowners will see drilling than otherwise would have. Landowner A may see 3-4 laterals drilled under his property when previously he might have seen 6-8 laterals. But it means that Landowner B will see 3-4 laterals tooinstead of none.

*NGIs Shale Daily(Apr 8, 2016) Some Utica Operators Revert to Wider Well Spacing to Cut Costs; Others Testing Limits

04/11/16 03:11:23PM @david30:

Received in mail from PennMarc Resources offer for $3500 per acre for 100% xfer of OMG..... thinking this is going in trash, but thought was worth sharing. Any ideas on what really 100% xfer of rights is worth? Sullivan township.

04/11/16 03:41:31PM @josie:

Hi Davis, thanks for posting that.

Ann Ticopa
04/11/16 05:40:48PM @ann-ticopa:

It appears (from Landex) that what Pennmarc is (mostly) buying is mineral rights (by deed). There are 68 entries for Bradford County, several for Tioga.
The following names were on some of the deeds. Don't know if they are four separate companies or one company with four names. <g>

I don't know what agricultural/recreational land sells for now, but that doesn't sound like a "bad" offer for mineral rights.

04/11/16 07:01:04PM @josie:

Hi Ann, I am curious to know why you think that offer is not "bad". Do you have access to information in that regard that you can share? Thank you

04/11/16 07:01:44PM @josie:

Hi David, are there any Utica wells in Sullivan Township?

04/11/16 07:31:57PM @david30:
Yes, shell is just finishing up two... Think is Delaney pad. 5 Marcellus an now 2 Utica
04/11/16 07:40:24PM @josie:

Good to know....thanks a lot

04/11/16 07:42:41PM @david30:
An interesting thought occurred to me on selling 100% omg say on 20 acres.. Each layer is repooled? So actually is 20 acres Marcellus an 20 acres Utica to purchasing folks...... then perhaps 20 acres Trent. So really they should offer to buy 60 acres... @3500.00 per acre to be fair... 8)
04/11/16 07:59:21PM @josie:

Interesting concept.......why don't you write them back and ask then, "which layer they are making the offer for?" Or better yet offer to sell them the Marcellus for $3500/ac. (smile)

04/11/16 08:24:54PM @josie:


Are you leases and in a production unit & held by production? If you are you would need avertical Pugh clause in order to sell each layer one at a time. (I think)

Ann Ticopa
04/11/16 10:32:16PM @ann-ticopa:

The offer is 3.5x SWEPI's 10 year lease bonus. Sure, the estimated royalty would likely more than make up the difference. But it's no sure thing that the property would be developed. So for some landowners, the "sure thing" could be the better choice.

04/11/16 10:41:08PM @josie:

I agree with the concept.

04/17/16 07:30:39PM @gringo:

Try 3k in good area if good Royalty %. Marginal area no buyers. HBP'ed leases could be many years until you get more than the 5 per acre shut-in per year. Unleased in good area add 1-1.5k. Unleased in marginal area is going to stay unleased for long while. There are OGM's for sale with local realtors for 2-3k. I am sorry to have say this but this is the reality of the situation. Last months Swepi Royalty $1.46 per MCF. Anyone willing to pay 8-9k per acre I happily will sell unleased OGM's in Multiple townships of Tioga Co.

Jack Young
04/18/16 10:20:39AM @jack-young:

Remember that when you buy you're using post-tax dollars, whereas the money you get for leasing is pre-tax. I'd say that the premium for quality unleased OGMs is only about $500/acre right now since you will only keep about1/2 of the $1,000/acre Shell is likely to pay you after taxes. And old leases often have higher royalties than anyone offers now, and in that case the premium shrinks further. Otherwise, I agree with your opinion on this completely. It's a true buyers market at present.

04/18/16 03:12:23PM @paleface:

David are the Utica wells drilled?

04/18/16 03:34:19PM @josie:

I no longer think that is correct.

04/20/16 02:52:49PM @josie:

From the PittsburghTribune-Review:

Construction has begun on a long-delayed $780 million natural gas-fueled power plant in South Huntingdon that has drawn fire from environmentalists and neighbors almost since the day it was proposed in 2009.

In those seven years, regulatory hurdles, threats from opponents and a weak market for selling electricity have caused Nebraska-based Tenaska Inc. to delay plans to build the plant on 50 of the 400 acres it owns south of Interstate 70 near Route 31.

But on Tuesday, Tenaska spokeswoman Timberly Ross wasted no words in announcing that the project, which received its final air quality permit from the state Department of Environmental Protection this year, has received full financing and is finally under way.

Its a go, she said.

Two natural gas- and one steam-powered turbine will be built at the plant, expected to generate up to 925 megawatts of electricity, enough to serve 925,000 homes along the East Coast, company officials said.

As many as 30 workers have been at the site for the past several weeks preparing the property for construction.

Tenaska officials estimate 300 construction jobs will be created to build the plant over the next three years. About 25 full-time employees will be hired to operate the plant once it is completed in 2018.

Tenaska typically encourages its contractors to hire and contract locally, whenever possible, and that commitment continues at Tenaska Westmoreland, said Vasu Pinapati, engineering and construction project director.

Westmoreland County officials said the project will provide a multifaceted boost to the local economy.

Any project like this is going to be good for the county. They committed to employing county residents for the work, said Commissioners Chairwoman Gina Cerilli.

Commissioner Charles Anderson said he was glad to see the project finally get off the ground.

I see this as a bright spot for Westmoreland County. Its exciting, and Im glad they finally pulled the trigger, Anderson said.

County Planning Director Jason Rigone called the power plant the countys largest construction project in recent years and one that is needed.

With the closure of coal-powered plants in southwest Pennsylvania, we needed to replace the loss in megawatts. Now this clean-burning natural gas plant will certainly help, Rigone said.(2)

(1) Tenaska (Apr 19, 2016) Tenaska Closes $780 Million Financing for Natural Gas-fueled Power Plant in Pennsylvania

(2) Pittsburgh (PA)Tribune-Review(Apr 19, 2016) Construction begins on $780M South Huntingdon power plant

04/20/16 02:55:41PM @josie:

Heres a report from top energy law firm Steptoe & Johnson:

At a recent Congressional Call-Up organized by the Independent Petroleum Association of America (IPAA), participating company representatives were briefed by IPAA staff on key federal issues impacting the oil and natural gas industry. The thrust of the briefing, which would be the nucleus of our comments delivered to members of Congress later that day, focused not on any one issue but rather the significant number of actions underway within the federal system. These actions were current agency proposals that had been listed in the Federal Register as either proposed or final and would in one way or another affect the oil and natural gas industry.

The list of separate actions totaled 44. Agencies identified on the list included the Environmental Protection Agency (five separate actions), the Bureau of Land Management (nine separate actions), the Fish and Wildlife Service (ten separate actions), the Bureau of Ocean Energy Management (five separate actions), the Bureau of Safety and Environmental Enforcement (three separate actions) and the Pipeline and Hazardous Materials Safety Administration (five separate actions). Throw in the White House National Ocean Policy rule, the Office of Natural Resource Revenue, the Forest Service, the Security and Exchange Commission and Occupational Safety and Health Administration and we were looking at a well-planned attack on virtually every aspect of oil and natural gas planning, production and use. The proposals include both onshore and offshore requirements and cover air, water, threatened and endangered species, pipeline integrity, oil and gas transportation, hydraulic fracturing on federal lands and more.

Additionally, we understood that most, if not all, of these proposals were on a fast track to be finalized and implemented as part of the Obama Administrations legacy of disdain for fossil fuels. While some of these individually would have a minor impact on current industry practices, others will significantly change and/or restrict how industry operates and collectively, all these actions will have a dramatic impact on the production of oil and natural gas in the United States.

Company representatives later reported that nearly all the members of Congress that were approached expressed an awareness of this late term effort by the Obama Administration, although most were surprised by the sheer number of actions underway. They acknowledged that Congressional oversight and intervention may be the only way to impact and slow some of these actions.*

*The National Law Review/Steptoe & Johnson (Apr 19, 2016) Federal Agencies Assault Oil and Natural Gas Industry

Ann Ticopa
04/21/16 06:02:55PM @ann-ticopa:
"Kinder Morgan shelves $3 billion pipeline project""The energy giant Kinder Morgan Inc. has pulled the plug on its controversial natural gas pipeline proposed through parts of Massachusetts and Southern New Hampshire, after failing to sign up enough utility customers and facing stiff consumer and political opposition.Kinder Morgan said on Wednesday that its Northeast Energy Direct project didnt receive the commitments from big customers that it needed to proceed with the $3.3 billion plan, which would involve building a 188-mile pipeline from a point west of Albany, N.Y., to Dracut. ..."https://www.bostonglobe.com/business/2016/04/20/kinder-morgan-shelves-billion-new-england-pipeline-project/iEafnAP2P41o0B9tmM0lEI/story.htmlYet another project that - in the end - was called off because of lack of financing.
04/21/16 06:29:15PM @josie:

Kinder Morgan said Wednesday it has suspended work and spending on a controversial proposed pipeline that would have transported shale gas from Pennsylvania to New England.

The reason: Kinder Morgan and its subsidiary, Tennessee Gas Pipeline Company, did not receive the level of contractual commitments it expected from customers in the region, the energy company said in a statement.

The proposed $3.3-billion Northeast Energy Direct project would have comprised 430 miles of pipeline running through New York to Massachusetts and New Hampshire to supply the Northeast U.S. with natural gas.

Unfortunately, despite working for more than two years and expending substantial shareholder resources, TGP did not receive the additional commitments it expected, Kinder Morgan said of the project, which was originally authorized by the company in July 2015.

Several factors caused the insufficient commitments, according to the company.

First, New England states did not have regulatory procedures to facilitate binding commitments from local electric companies. Second, a low-price energy market, while good for consumers, Kinder Morgan said, made it difficult for producers to make long-term commitments.

The pipeline had been greeted with stiff opposition from politicians, such as Massachusetts Sen. Elizabeth and Vermont Sen. Bernie Sanders, as well as environmentalists and local residents who live close to the pipelines proposed route.

Kinder Morgan said Wednesday it remains committed to meeting the critical need for constructing additional natural gas infrastructure in the Northeast and will work with local parties to explore alternatives.(1)

Junior Massachusetts Sen. Ed Markey celebrated the announcement, noting that he has opposed the pipeline over concerns of its potential impact on local communities and climate change.

Using New England as a throughway to export U.S. gas to overseas markets might be good for the bottom lines of pipeline companies but it could raise prices and be a disaster for consumers and businesses in our region, Markey said in a statement Wednesday.

We need to build on the work that we have done in New England to move to a clean energy economy, the Democratic senator added. And we should create jobs in New England by working smarter not harder when it comes to using natural gas through increasing efficiency and repairing and replacing our aging and leaking natural gas distribution pipeline infrastructure.(1)

This is what Ive been hoping and praying for, for more than a year, that this might actually happen, said a jubilant Holly Lovelace. That they would go away.

Lovelace lives on Gulf Road in Northfield, not far from where a large-scale gas compressor station was expected to be built to help push 1.2 billion cubic feet of natural gas along a proposed 30-inch diameter pipeline, the Northeast Energy Direct, each day.

But on Wednesday, Lovelace received the news she and hundreds of other area residents had been hoping to hear for the better part of two years: the project has been suspended in its current configuration, according to energy giant Kinder Morgan, the pipelines Houston-based developer.

Ben Clark of Clarkdale Fruit Farms in Deerfield, who has criss-crossed the state to testify before state legislative and department hearings in his efforts to prevent the pipeline from being close to his familys 100-year-old orchards, let out an audible sigh of relief while discussing the announcement with a reporter over the phone.

Its amazing. Our family is overwhelmed and overjoyed, he said. Were happy to be on the winning side with so many of our neighbors and other committee members whove opposed this all along. Were glad they finally got the point.

Deerfield Selectman Carolyn Shores Ness, who lives on the pipelines proposed path and who has been involved with a volley of town legal actions to halt the project in one way or another, expressed relief at the news, but vowed to continue working to build a case against the project should it be revived at some point.

Im so excited and thrilled, I cant even say enough. There are no words to express it, Ness said. But we cant let down our guard, cant give up the fight. We have solid legal arguments that we have to pursue, she said.

Maple sugarer Dana Goodfield of Stonegate Farm in Conway was delighted to hear news.

Wow! Obviously, were very happy with that because it was slated to go through our sugar bush.

A few miles away, in Ashfield, Will Elwell was on a tractor, tilling a field, when his wife, Donna, called out to him: The pipeline is dead.

Ive just come in to read it online, Elwell said Wednesday afternoon. A few weeks ago, Elwell had built a replica Henry David Thoreau cabin directly over the pipeline route, as an act of protest against a pipeline that seemed on a course against the will of the landowners involved. Dozens of residents had helped him build it, including two of the towns Selectboard members.(2)

That New England project going offline is concerning, Charlie Smith, chief investment officer at Fort Pitt Capital Group, said in a telephone interview. All theyve talked about is the huge arbitrage between Marcellus Shale gas as some of the cheapest in the world and Northeast electricity being some of the most expensive. Unless Im missing something, this shouldve worked.(3)

(1)Boston(MA)Herald(Apr 20, 2016) Kinder Morgan suspends work on Northeast Energy Direct gas pipeline

(2) Greenfield (MA)The Recorder(Apr 20, 2016) Locals cheer suspension news

(3) Bloomberg (Apr 20, 2016) Kinder Cancels Gas Pipeline, Demands Collateral as Slump Deepens

Ann Ticopa
04/22/16 11:35:22PM @ann-ticopa:
"New York State Department of Environment Conservation Denies Water Quality Certificate Required for Constitution Pipeline""The Constitution proposal involved construction of approximately 124 miles of new interstate natural gas piping in northeastern Pennsylvania, proceeding into New York State through Broome, Chenango, Delaware, and Schoharie Counties, terminating at the existing Wright Compressor Station in Schoharie County. ...DEC had repeatedly requested that Constitution provide a comprehensive and site-specific analysis of depth for pipeline burial to mitigate the project's environmental impact - but the company refused - providing only a limited analysis of burial depth for 21 of the 250 New York streams. ...Additionally DEC received reports that landowners, possibly with Constitution's knowledge, clear cut old-growth trees along the right-of-way for the pipeline, including trees near streams and water bodies, even after the Federal Energy Regulatory Commission ruled that Constitution could not cut trees in the right-of-way. ..."http://www.dec.ny.gov/press/105941.html"Re: Joint Application: DEC Permit# 0-9999-00181/00024 Water Quality Certification/Notice of Denial"[819kb pdf]http://www.dec.ny.gov/docs/administration_pdf/constitutionwc42016.pdf
04/25/16 04:31:39PM @josie:

Anyone know what the average well depth in Delmar and or Tioga County is for:

1.) Marcellus Vertical well

2.) Utica Vertical portion


04/26/16 08:39:39AM @david30:
Josie, for Marcellus around mainesburg (tioga) I see average of about 5,800 vertical feet for horizontal turn on Delaney wells. Not sure if smith well is purely vertical, depth is 8,300. I do not have any Utica well names to look up in ShaleCast site. Depth is in well reference area of site.
04/26/16 10:28:59AM @josie:

Okay thanks David

Ann Ticopa
04/28/16 08:56:28AM @ann-ticopa:
HARER WELL UNIT 713 - SWEPIBOGAR RUN RD, BLOSSBURG, Liberty Twp21H, 23H, 25H drilling permits applied for 4/18.
Christopher Meehan
04/28/16 11:37:20AM @christopher-meehan:

Ann, I live in Blossburg but in Hamilton twp. Talisman has 2 wells right near me, Fredrick and Olsen. They told me in Feb that their budget was slashed 50% and the well we are supposed to be on ( Jones) is on hold. I found out that they are now going to drill a well closer to Morris Run which is away from my house. I don't know what is going on.

04/28/16 12:06:30PM @josie:

IFO: PA Gov. Wolf Proposes Highest Severance Tax in Nation

Pennsylvanias Independent Fiscal Office (IFO) said this month that Democratic Gov. Tom Wolfs latest proposal to enact a 6.5% severance tax on natural gas production would give the state the highest effective rate in the country.

In an analysis of the 2016-2017 executive budget proposal released last week, the IFO said Wolfs plan to impose a 6.5% rate at projected regional prices ranging from $1.37/Mcf to $3.71/Mcf from 2016 through 2021 would lead to an effective rate of 8.5%. Wolf wants to keep the states impact fee and allow producers a credit for those fees that would reduce their severance tax payments. But the IFO said keeping the impact fee would push the effective rate higher.

The impact fee is charged for all unconventional wells during their first 15 years in operation, regardless of how much they produce. IFO said its market value, or tax base, was estimated by multiplying forecasted unconventional gas well production by the spot price at regional hubs such as Leidy and Dominion South. Wolfs proposal would not allow a deduction for post-production costs. Projected tax collections included in the analysis were determined by applying the 6.5% rate to the tax base and deducting the impact fee credit.

If passed, only Oklahoma would have an effective rate anywhere near comparable at 5.4%, according to the IFOs calculations.

The most recent IFO report further demonstrates that Gov. Wolfs energy tax increase proposal would make Pennsylvania the highest natural gas taxed state in the country, with a tax rate at a whopping 54% higher than top gas producing states Texas and Louisiana, said Marcellus Shale Coalition (MSC) President Dave Spigelmyer. Given the ongoing market challenges that have led to deeply painful job and investment cuts that are impacting countless Pennsylvanians, there couldnt be a worse time for new and even higher energy taxes.(1)

Here is the IFOs analysis of Wolfs disastrous 2016 severance tax proposal:

Natural Gas Severance Tax

The administrations proposal levies a tax on the severance of unconventional (i.e., shale) natural gas within the Commonwealth. The tax rate is 6.5 percent of the value of natural gas extracted and does not allow a deduction for post-production costs. The amount paid in unconventional gas well impact fees is applied as a credit against the severance tax. The estimate assumes an effective date of July 1, 2016, with remittances due on the 20th day of the fourth month following production; therefore, collections begin in November 2016.


The estimate is based on the projected market value of natural gas sold at the Leidy and Dominion South trading hubs. A trading hub is a fixed point where pipelines connect and natural gas is bought and sold. Prices at the hub include post-production costs such as gathering, processing and transportation. The market value, or tax base, is estimated by multiplying unconventional gas well production by the spot price at the regional hubs. These variables are estimated by the IFO based on data from Bentek Energy. Projected tax collections are determined by applying the 6.5 percent rate to the tax base and deducting the impact fee credit. Impact fee revenues are based on the number and age of unconventional gas wells projected to be subject to the fee and the applicable rate schedule under current statute.

The price forecast assumes that natural gas prices will increase through FY 2020-21, as more wells are connected to an expanding pipeline network that serves new markets in the northeast, midwest and south. The production forecast assumes modest gains in the near term due to (1) low regional prices and reduced drilling activity in 2016 and 2017 and (2) a reduction in output due to the imposition of the severance tax, which reduces demand when passed through to final consumers in the form of higher prices.

Revenue Impact

The top portion of the table on the next page displays production, price, tax base and impact fee data on a calendar year basis. For the impact fee, the amounts listed represent the year in which the fee is generated, as opposed to the year the fee is remitted (generally the following year). The analysis projects that impact fee revenues will continue to decline in 2016 due to low national prices (which reduce the applicable fee schedule) and a significant decline in new wells drilled.

The bottom portion of the table uses the calendar year data to generate revenue estimates on a fiscal year basis, which reflect the four-month lag between production and remittance of tax. In FY 2017-18 (first full fiscal year), the analysis projects $517.0 million of net tax revenue, growing to $968.5 million by FY 2020-21. For FY 2017-18 and FY 2018-19, impact fee credits increase due to a higher fee schedule.


Click for larger version

Interstate Comparison

The proposed severance tax can be compared to severance taxes levied by other major natural gasproducing states by computing a lifetime effective tax rate (ETR) for each state. The lifetime ETR is the average effective tax rate over all productive years for a single well. It is equal to the net present value of severance taxes remitted divided by the net present value of the market value of gas. The lifetime ETR most accurately reflects differences between state severance taxes because some states have special provisions that reduce tax rates for the first two to four years of production or until the value of the gas extracted exceeds a portion of all drilling costs (e.g., Arkansas and Louisiana).

For the purpose of the numerator in the ETR computation, the analysis applies the same parameters to each state: (1) the well is drilled in 2016 and begins production on January 1, 2017, (2) it produces 10 billion cubic feet of natural gas over a 30-year lifetime, (3) it has a production profile (decline curve) similar to a recently-drilled Marcellus shale well and (4) natural gas extracted from the well is valued at a blended spot price for Pennsylvania regional hubs. Drilling costs and the tax policies specific to each state, including any special provisions, are used to calculate severance tax revenues for that state.

The table below shows lifetime ETRs for the proposed Pennsylvania severance tax and six other states using two valuations of natural gas for the denominator based on (1) the hub price and (2) the wellhead price. The proposed Pennsylvania severance tax reflects market value at the hub (i.e., no deduction for post-production costs), but most other states apply the tax to market value at the wellhead (which allows post-production deductions). The entry for Pennsylvania includes the total ETR and its components: the current natural gas impact fee and the additional proposed severance tax. The final column displays total production for 2015 and shows that Pennsylvania recorded the second highest level of output in the U.S. (including states not used for the tax comparison).

Based on the price assumptions from the first table in this subsection, the analysis finds that the total lifetime ETR for Pennsylvania is the highest among comparison states: 6.5 percent based on market value at the hub, or 8.5 percent based on value at the wellhead (before deduction of the impact fee credit). The analysis finds that the impact fee has a much lower effective tax rate: 0.9 percent at the hub, and 1.1 percent at the wellhead. Allowing for the deduction of the current impact fee yields a lifetime ETR of 5.6 percent at the hub and 7.4 percent at the wellhead.

These ETR computations underscore the fact that changing the point of comparison (hub or wellhead) does not change Pennsylvanias relative tax ranking; it merely adjusts all ETR computations up or down by roughly the same proportion. That result occurs because the denominator is adjusted by the same amount (i.e., post-production costs) for each state.(2)


04/28/16 12:07:21PM @josie:

More Evidence that the Shell Ethane Cracker Plant in PA is a Go

Heres the latest evidence:

Royal Dutch Shell appears to be moving forward with its plan for a petrochemicals plant in the Western Pennsylvania city of Monaca, according to the Philadelphia-based owner of a nearby shopping mall that expects to benefit from the proposal.

Shell recently made a fresh land acquisition near the site of the proposed complex and started leasing part of Beaver Valley Malls parking lot from owner Pennsylvania Real Estate Investment Trust (PREIT) for a significant sum of money, said Joseph Coradino, the mall developers chief executive officer.

All indications are that Shell is going to go forward, Coradino said during a conference call with analysts Wednesday.

He did not elaborate on how Shell would use acquired and leased land.

The energy giant has begun completion of some preliminary work at the site of a proposed $2 billion ethane cracker on the Ohio River in Beaver County, but it has not yet officially committed to the project. The facility would process ethane derived from Marcellus Shale gas into ethylene, which is used in the production of plastics and solvents.

Coradino said PREIT was monitoring Shells moves around the plant as it decides what to do with Beaver Valley Mall, its worst-performing asset. The company has sold off other lesser-performing properties in an effort to bolster the overall value of its portfolio.

The tail wagging the dog is the Shell cracking plant, he said of Beaver Valley.

If the cracker proposal goes forward, the mall would be able to attract new tenants to serve the 10,000-member crew Shell has said would build the project, boosting its value, Coradino said.

PREIT is already under contract to sell two pieces of mall property to an adjacent landowner for construction of an office building and a hotel, he said.

Neither PREIT nor Shell responded immediately to messages seeking more details.

PREITs local mall properties include the former Gallery at Market East, which is being rehabbed into an outlet center; Willow Grove Park; and Cherry Hill Mall.*

*Philadelphia(PA)Inquirer(Apr 28, 2016) PREITs CEO: Shell advancing planned western Pa. petrochemicals plant

Ann Ticopa
04/28/16 01:48:07PM @ann-ticopa:

Repsol (the company that bought Talisman) did have a recent set-back. They have an LNG import termanal (Canaport) in Canada and had gotten permits to add export capability. But the plan has been put on hold because of inability to find (enough) outside investors and customers. Plus, LNG is approaching "excess" status.
On the plus side, Repsol has a reputation of being a well run company, unlikely to do something reckless.

Christopher Meehan
04/28/16 02:57:23PM @christopher-meehan:

I saw that article before and now it makes sense. They are supposed to put a pipeline through the property this year too, I guess that is gonna get scrapped too. I wonder what their next play will be.

Ann Ticopa
04/29/16 11:10:14AM @ann-ticopa:
Application to PA PUC:"Petition of UGI Utilities, Inc.Gas Division for a Waiver of the Distribution System Improvement Charge Cap of 5% of Billed Distribution Revenues and Approval to Increase the Maximum Allowable Distribution System Improvement Charge to 10% of Billed Distribution Revenues" PA Bulletin - April 30, 2016http://www.pabulletin.com/secure/data/vol46/46-18/765.html
Ann Ticopa
04/29/16 11:31:11AM @ann-ticopa:
SUSQUEHANNA RIVER BASIN COMMISSIONProjects Approved for Consumptive Uses of WaterApril 30, 2016" 7.SWEPI, LP, Pad ID: Cole 495, ABR-201102016.R1, Richmond Township, Tioga County, PA; Consumptive Use of Up to 4.0000 mgd; Approval Date: March 9, 2016.8.SWEPI, LP, Pad ID: Boroch 477, ABR-201102018.R1, Charleston Township, Tioga County, PA19.SWEPI, LP, Pad ID: Kuhl 529, ABR-201102014.R1, Richmond Township, Tioga County, PA; Consumptive Use of Up to 4.0000 mgd; Approval Date: March 11, 2016.20.SWEPI, LP, Pad ID: Stanley 1106, ABR-201102015.R1, Osceola Township, Tioga County, PA; Consumptive Use of Up to 4.0000 mgd; Approval Date: March 11, 2016.21.SWEPI, LP, Pad ID: MY TB INV LLC 891, ABR-201102010.R1, Deerfield Township, Tioga County, PA; Consumptive Use of Up to 4.0000 mgd; Approval Date: March 11, 2016."http://www.pabulletin.com/secure/data/vol46/46-18/776.html
05/02/16 11:16:17AM @josie:

Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy

The producers primary assets are gas-producing properties in Wyoming, as well as some assets in Pennsylvania and crude oil properties in Utah, according to Bankruptcy Court papers.

The low commodity prices, and especially the low natural gas prices that prevailed in 2015 and have continued through the first four months of 2016, have had a devastating impact, Ultra Chief Financial Officer Garland Shaw said in a filing explaining events that led to the bankruptcy.

Court documents show five firms hold at least 5.2% of Ultras equity, including Disciplined Growth Investors (9.1% of company equity), Invesco (7.9%), Vanguard (6.7%), Blackrock (5.7%), and State Street (5.2%).

The largest unsecured investor, owed a disputed $1.46 billion is in the form of private placement notes issued by Ultra Resources in care of Morgan, Lewis & Bockius.

Between March and early April, Ultra missed a series of principal and interest payments owed to lenders and bondholders. And on April 14, the company was sued by pipeline operator Sempra Rockies Marketing for failing to pay transport fees.(1)

And this:

Ultra Petroleum Corp. filed for bankruptcy protection, the latest oil and gas explorer to fall victim to the prolonged slump in energy prices.

Ultra listed $1.3 billion in assets and $3.9 billion in debt in court papers filed in Houston on Friday. The Houston-based company has 159 employees and its main assets are gas-producing properties in Wyoming, as well as some assets in Pennsylvania and crude oil properties in Utah, according to court papers.

The low commodity prices, and especially the low natural gas prices that prevailed throughout 2015 and have continued through the first four months of 2016 have had a devastating impact, Chief Financial Officer Garland Shaw said in a filing explaining events that led to the bankruptcy.

Among its first requests to the court will be for permission to continue a surety bonding program that had $12.6 million outstanding as of the bankruptcy date, and that secures its obligations on environmental, road damage, and plugging of wells, according to court records.

Between March and early April, Ultra missed a series of principal and interest payments owed to lenders and bondholders. And on April 14, the company was sued by pipeline operator Sempra Rockies Marketing LLC for failing to pay transport fees.(2)

(1)Kallanish Energy(May 2, 2016) Ultra Petroleum files for Chapter 11

(2) Bloomberg (May 1, 2016) Ultra Petroleum Files for Bankruptcy, Citing $3.9 Billion Debt

Jack Young
05/02/16 12:51:49PM @jack-young:

Lucky they sold their local assets to Shell, or we'd all be wondering what was coming next. There's areal advantage being leased by one of the truly big operators.

05/02/16 01:51:46PM @david30:

Thanks for the post. I was taken aback by reading that Ultra failed to pay transport fees. Showing my ignorance of landowner deductions I though compression an transport costs were 'a guess' pass thru. And reason for months behind actual reimbursement to get all the fees in line. Having a well that at one point was managed by both Ultra and Shell. I kinda recall (memory is failing) that Ultra had higher fees on compression transport. I just thought at time that Ultra was smaller company and had to pay more since smaller volume. So my concern is there any clarity on fees that well mangers have to the land owner?

05/03/16 01:48:18PM @josie:

EIA produces new maps of the Utica Shale play

The U.S. Energy Information Administration has produced new maps that show the structure, thickness, and geologic setting of the Utica Shale play and the location of production wells. Production of oil and natural gas from the Utica play has increased since 2011, with more than 1,700 wells drilled as of January 2016. The Utica play includes both the Utica formation and the deeper Point Pleasant formation, each with its own characteristics.

The Utica play spans about 60,000 square miles across Ohio, West Virginia, Pennsylvania, and New York. The geologic characteristics of the Utica and Point Pleasant formations, which are discussed in EIAs update, are favorable for the accumulation and production of hydrocarbons.

The Utica map is one of several maps of low-permeability hydrocarbon formations that EIA updated with additional geologic detail. EIA has previously published updated maps of major geological and tectonic features for theMarcellusandEagle Fordplays. EIA has also provided shapefiles for structure and thickness maps for the following:Marcellus,Eagle Ford,Abo-Yeso, Bone Spring, Delaware, Glorieta-Yeso, Spraberry,Bakken, Three Forks, andNiobrara.


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Click for larger version

Source:U.S. Energy Information Administration, based on DrillingInfo, Inc., IHS Inc., the Appalachian Oil and Natural Research Consortium, and U.S. Geological Survey

The Utica is a stacked play that includes both the Utica formation and the underlying Point Pleasant formation. Currently, the deeper Point Pleasant is more often targeted for oil and natural gas drilling because it is more productive. Most of the more productive areas across the Point Pleasant formation footprint are in eastern Ohio and western Pennsylvania. Subsea elevation contour maps representing the top surface of each formation were developed with depth measurements from wells and outcrop data from the U.S. Geological Survey. These maps represent subsea depths and only roughly approximate drilling depth to reach the top of each formation.

The Point Pleasant formation is deepest in the southwest region of Pennsylvania, reaching subsea depths of more than 13,000 feet, and it is shallowest at the junction of Ohio, Indiana, and Kentucky. The Utica formation reaches subsea depths of up to 12,500 feet in a northeast arc though Pennsylvania and is also shallowest at the junction of Ohio, Indiana, and Kentucky. The most productive wells in the Utica formation are found at subsea depths ranging from 5,000 to 11,000 feet.

Structure maps not only provide valuable drilling information, but they also lend insight into the distribution of oil and natural gas throughout the play. Temperature and pressure, which are functions of a formations depth, are key factors in the amount of oil and natural gas present in the formation.


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Source:U.S. Energy Information Administration, based on DrillingInfo, Inc., IHS Inc., the Appalachian Oil and Natural Research Consortium, and U.S. Geological Survey

Thickness maps (isopach) for each formation individually and for the Utica play as a whole were developed using observations from wells. The maps also show areas of high organic content, which is a factor in the amount of hydrocarbons in the rock. Like structure maps, isopach maps provide valuable drilling information because thickness of the reservoir is a key factor in determining whether, and where, to drill a well.

The Utica formation is thickest in western Ohio and the northwest corner of Pennsylvania at 200-300 feet and thins to 50 feet or less in southern Ohio and northern Kentucky. The Point Pleasant formation reaches a thickness of more than 200 feet in central Pennsylvania and thins to less than 20 feet in the eastern half of Kentucky. The combined thickness of Utica and Point Pleasant is less than 100 feet in the area where Ohio, West Virginia, and Kentucky meet. The thickness reaches more than 300 feet in northwest and central Pennsylvania, and in northeast and central Ohio. Most producing wells are located where the formation has a thickness of 150 feet or more.

05/04/16 02:00:07PM @josie:

Looks like more than a few Faults crisscrossing Tioga county. Anyone have information about where exactly these faults are in relationship to Utica wells wells being drilled in Delmar and Middlebury Townships?

05/04/16 03:23:40PM @gringo:

Those are just major faults, there are countless numbers of faults in the county. Some are detrimental and many are none issues. Swepi has it all detailed on their mapping system, and no it is not for public view.

05/04/16 08:16:27PM @josie:

Royal Dutch Shell first quarter earnings down 58 percent

LONDON (AP) Oil company Royal Dutch Shell said first-quarter earnings plunged 58 percent as depressed crude prices create hugely challenging times for the energy industry.

The Anglo-Dutch company said Wednesday that profit adjusted for changes in the value of inventories and excluding one-time items dropped to $1.55 billion from $3.74 billion in the same period of 2015.

The results came after Shell completed a $54 billion takeover of BG Group Plc earlier this year a deal that increases the companys proven reserves of oil and natural gas by 25 percent. While critics questioned the deal following the drop in oil prices, Shell said it would provide opportunities to cut costs by eliminating duplication.

The completion of the BG deal has reinforced our strategy and strength against the backdrop of hugely challenging times for our industry, CEO Ben van Beurden said Wednesday in a statement. For Shell and our shareholders, this is a unique opportunity to reshape and simplify the company.

Oil companies around the world are slashing jobs and postponing investments to adjust to lower energy prices.

Shell forecast capital investments of around $30 billion this year, 36 percent less than Shell and BG invested in 2014. Operating expenses will be around $40 billion, compared with a combined $53 billion in 2014, Shell said.

First-quarter net income fell 89 percent to $484 million.

Brent crude, the benchmark for international oil, dropped to a 12-year low of $27.10 a barrel in January after trading above $100 as recently as September 2014. It traded at $45.08 on Wednesday.

Prices have fallen because production remains high even as slower economic growth, particularly in China, reduces consumption. OPEC hasnt cut output and Iran wants to turn on the taps after decades of economic sanctions.

Related news:Exxon, Royal Dutch Shell and BP report lower reserves replacement


05/05/16 11:54:39AM @josie:

2 New Shale Layers in Eastern Ohio Good Candidates for Drilling --LOOK AT THE MAPS --


*Ohio Dept. of Natural Resources Division of Geological Survey (May 2, 2016) Mapping Source Rock and Thermal Maturity of the Devonian Shale Interval in Eastern Ohio


The stratigraphic interval for this investigation extends from the top of the Middle Devonian Onondaga Limestone to the base of the Upper Devonian Berea Sandstone. Devonian shale source rock geochemistry and thermal maturity data were compiled from all available published sources and from archived data for 201 wells in eastern and central Ohio. From this comprehensive database, maps of total organic carbon (TOC), existing hydrocarbons (S1), hydrocarbons generated during pyrolysis (S2), vitrinite reflectance (%Ro), and conodont alteration index (CAI) were constructed to better refine the source rock generative potential and thermal maturity of the Devonian shale interval in eastern Ohio. Generally, westward increases in TOC, S1, and S2 were evident from these preliminary maps. Maximum TOC values per well ranged from 0.5 to 18.4 percent with over 70 percent of the wells having values greater than 4 percent,which is considered excellent source rock potential. The maximum value of TOC for the Devonian shale was over twice that of the Upper Ordovician Utica-Point Pleasant interval in eastern Ohio. The maximum S1 value was 8.6 milligrams of hydrocarbons per gram (mg HC/g) of rock (excellent source rock generative potential) and generally ranged from 1 to 2 mg HC/g of rock (good source rock generative potential). Maximum S2 values were often in the range of 1020 (very good) or 2040 (excellent) mg HC/g rock. Thermal maturity maps using %Ro and CAI revealed a basinward (eastward) transition to more thermally mature rocks. Maximum vitrinite reflectance values ranged from 0.33 to 1.34 %Ro. A 0.6 %Ro isograd trends northeastsouthwest through eastern Ohio, marks the onset of oil generation, and separates the immature region to the west. The oil window transitions eastward to a condensate or wet gas window at valuesbetween 1.1 and 1.4 %Ro. Vitrinite suppression was indicated by both a comparison with %Ro of the overlying coals and with reported historic production. While current Devonian shale horizontal drilling is focused on the Marcellus Shale, these maps and data present strong evidence that other organic-rich Devonian shale units, such as the overlying Huron Shale Member and Rhinestreet Shale Member, also have significant oil and gas potential and may be good candidates for modern-day horizontal drilling techniques.*

05/05/16 12:28:52PM @josie:

Shell Says PA Cracker Decision Coming < 12 Months - Looking Good

Lucas Hermann Deutsche Bank

Simon, hithree brief questions if I might. Firstly, hard choices given where youre at. Do you want to say anything around the Pennsylvania cracker timing, if at all?

Simon P. Henry Chief Financial Officer & Executive Director

The hard choices, there are three or four big projects, and the first on the list is in fact the one that you related, the chemicals in Pennsylvania, the others being Lake Charles, Gulf Coast; LNG Canada, British Columbia; and Vito deepwater, Gulf of Mexico. Further, theres sort of the big four greenfield, over which we could take a final investment decision in the next, well less than 12 months.

Its highly unlikely that more than I would say two, maybe only one, but will actually go ahead in that timeframe. And basically its a choice of whether, whats the best way of retaining or maximizing value from that set of opportunities. The chemicals plant is probably the first one because of the timing of certain commitments that are already in place. Its an excellent project. Its got a diverse set of market exposures and risks associated with it, and therefore provides quite some portfolio resilience relative to the rest of the opportunities, not just the big ones, but the smaller ones as well.

Weve had quite a lot of discussion. Not yet pulled the trigger on it one way or the other. And certainly its not a free option of course. There are costs of keeping the option open. So not a decision yet, but it actually is looking. If it were not a $40 world, it would be probably a very easy decision. Its a very strong and robust project.*

*Seeking Alpha(May 4, 2016) Royal Dutch Shell Plc (RDS.A) Q1 2016 Results Earnings Call Transcript

05/06/16 11:44:43AM @josie:

New Bill Trims PA Govs Control over Environmental Quality Board

Rep. Cris Dush (R-Indiana) circulated a co-sponsor memo to his colleagues this week asking them to co-sponsor his bill to expand the Environmental Quality Board to 23 members, remove the DEP Secretary as Chair of the Board and double the number of members from or appointed by the House and Senate.

The Environmental Quality Board adopts all regulations for the Department of Environmental Protection like DEPs final drilling regulations now before the General Assembly.

Rep. Dush would add the Majority and Minority Chairs of the House and Senate Environmental Resources and Energy Committees, change the existing four appointments made by House and Senate leadership from being legislators to any member of the public they appoint and remove the Secretary of DEP as Chair and instead select a Chair from members of the Board.

The Board would retain the 5 members from DEPs Citizens Advisory Council and representatives of the departments of Health, Community & Economic Development, Transportation, Agriculture and Labor & Industry, the Fish & Boat and Game Commissions, Public Utility Commission, Director of the PA Historical & Museum Commission and the Executive Director of the State Planning Board.

There is no doubt this legislation was prompted by Rep. Dushs opposition to DEPs final drilling regulations.

Last week a budget amendment filed by Rep. Cris Dush (R-Indiana) would have allocated $600,000 in taxpayer money to DEPs Marcellus Shale oil and gas advisory committee to pay for legal and consulting experts to review drilling regulation changes proposed by the Department of Environmental Protection.(1)

Heres the memo being circulated by Dush:

Posted: May 4, 2016 03:29 PM
From: Representative Cris Dush
To: All House members
Subject: Environmental Quality Board (EQB) Reform

Please join me as a cosponsor of legislation that will strengthen the independence and integrity of the Environmental Quality Board (EQB). The EQB is a 20-member independent board within the Department of Environmental Protection (DEP) that is charged with adopting Pennsylvanias environmental regulations.

Because of its nature as an independent board, the EQB serves a critical role in the oversight of the executive branch to ensure that the Commonwealths environmental regulations protect the public interest.

Currently, the EQB consists of 20 members, with 11 members from the executive branch, five members from the Citizens Advisory Council, and four members of the legislature, each appointed by their respective caucus leadership.
The Secretary of DEP is both a voting member of the board and serves as its chair. However, this runs counter to the boards role as an independent check on the power of the DEP. My legislation restores the balance by removing the secretary from the EQB and making the chair of the board an elected position from among the members.

Further, to maintain adequate legislative oversight, the majority and minority chairs of the Environmental Resources and Energy Committees would become permanent members of the board. The four legislative appointees that had been reserved for legislators would instead be opened for members of the public, as appointed by the four legislative caucus leaders. Finally, the number of members which constitutes quorum is adjusted in this legislation to reflect the additional members.

Taken together, I believe that these reforms would improve the independence of the EQB, which serves to improve the quality of environmental regulations. Please join me in co-sponsoring this important legislation.(2)

Below is a copy of the proposed bill.

(1)PA Environmental Digest(May 5, 2016) House Bill Would Change Make-Up Of Environmental Quality Board

(2) Pennsylvania House of Representatives (May 4, 2016) House Co-Sponsorship Memoranda

05/10/16 12:27:32PM @josie:

TIOGA COUNTY - Rutland Township:

District Court Judge Tosses PA Landowners Lack-of-Drilling Case

There is no remedy at law for shattered dreams when a natural gas driller fails to develop wells as outlined in a lease, a federal judge says.

U.S. Middle district Judge Mathew W. Brann said that Thursday when he granted summary judgement to SWEPI, a subsidiary of Royal Dutch Shell based in Houston, Texas, in a breach of contract suit brought by Camp Neer Too Late, a small hunting and fishing camp in Tioga County.

The camp envisioned 11 natural gas wells on its 240-acres when it signed a lease with SWEPIs predecessor, East Resources Inc., in 2008 that included an up-front payment of $287,000.

Plans showed six wells on one pad and five on another. But only one well has been drilled and it is capped.

The lease also provided for a pipeline but restricted its use to gas drilled on camp property. But gas is flowing through [the] line constructed in 2012 from other sources.

The judge pointed out two right-of-way agreements subsequently executed with East were separate from the lease and neither contained a distinction between native and non-native gas.

The camp received extra compensation that he said shows it was surrendering additional contractual rights.

This dispute was fueled by the outsized and unsupported expectations during a time when such exploration was steadily reaching its zenith in Pennsylvanias northern tier counties, Brann wrote.

As the natural gas boom gradually winnowed, drilling companies, like the one hauled into court here, reacted with contractionary business decisions that included, among other defensive strategies, halting plans for the development of future wells.

A lessor has no remedy at law for its dissatisfaction with a natural gas company unless the development is mandated by the clear text of the agreement between the parties, the judge said.

The dispute gave the court the opportunity to resolve important issues involving the interpretation of contractual agreements in the natural gas setting, Brann wrote.

The judge noted the camps general partners, brothers Robert Schwoyer who lives nearby, and David and Ronald Schwoyer, negotiated the agreements without benefit of legal counsel versed in oil and gas matters.(1)

Another report on this case:

The unfolding of this dispute has confirmed the well-established principle that the disappointment and dissatisfaction felt by a natural gas lessor as a result of the lessees failure to develop its propertywhat plaintiffs representatives in this case have called their shattered dreamsdo not afford the lessor a remedy at law if such development is not mandated by the clear text of an agreement between the parties, Brann said.

Brann used his 81-page opinion in Camp Neer Too Late v. SWEPI to address what he said were important contract interpretation principles in the natural gas setting, particularly as they related to the nuanced economic climate of the industry. He also noted in several instances that the plaintiff appeared to be impacted by drafting the contracts themselves without the help of an energy attorney.

Camp Neer Too Late was a company formed to manage the business affairs associated with an oil-and-gas lease entered with SWEPI predecessor East Resources for drilling on a 230-acre plot in Tioga County that included nonprofit Neer Too Late Lodge.

In 2008, the parties entered into a lease in which Neer Too Late Lodge received an upfront payment of $287,500 and the promise of future royalty payments in the amount of one-eighth of the proceeds of sales of natural gas extracted from the property, Brann said. There was no contractual agreement as to the number of wells that had to be drilled, and only one had been drilled on the property at the expiration of the primary term of the lease, Brann said.

In 2010, the camp entered into a right-of-way agreement to allow East Resources, and then SWEPI, to gain right-of-way access through the placement of additional pipes. The camp was not represented by counsel when this was done and it received about $60,000 and about $104,000, respectively, for the two right-of-way amendments, Brann said. While paragraph 12 of the initial oil-and-gas lease allowed any pipes East Resources placed on the property to carry only gas drilled from the property, the right-of-way agreements gave broader rights to SWEPI to use the pipes for nonnative gas, the judge ruled.

By October 2012, the pipeline project was complete and only non-native gas was running through the pipes. A year later, with no royalty payments received, Neer Too Lates representatives wrote to the drillers to ask what the plans were for the property. They said the whole situation resulted in their shattered dreams, Brann said.

The crux of the case is whether the right-of-way agreements were separate contracts or an extension of the initial lease, and whether the right-of-way agreements superseded paragraph 12 of the lease that barred non-native gas in the propertys pipes.

While the lease and the right-of-way agreement were executed between the same parties and concerned the same general economic activity, Brann said they were negotiated at different times, involved different contractual rights and involved separate payments to the plaintiff for those rights. Brann said they were separate agreements, leading him to have to decide whether the right-of-way agreement incorporated paragraph 12 of the lease.

Brann said the only support for the plaintiffs argument that paragraph 12 was incorporated was the introductory paragraph to the 2010 right-of-way agreement. That paragraph stated that if any of the following provisions conflict with or are inconsistent with any of the printed provisions or terms of the right-of-way agreement or original oil-and-gas lease and addendum, the following provisions, and the nonconflicting terms of the original oil-and-gas lease and its addendum shall control and be deemed to supersede the printed terms of the right-of-way agreement.'

Brann said that was too insubstantial a showing for the plaintiff to survive summary judgment. He said nothing in the 2010 agreement discussed native versus non-native gas.

What would have been the obvious course of action by a party who sought above all else to preserve the native gas requirement? Brann asked. Certainly, it would have been to include an explicit provision referencing the preservation and incorporation of paragraph 12 of the original leases addendum into all subsequent right-of-way agreements.

At least that much would have been apparent to a legal professional reasonably practiced in the arena of oil and gas law.

Brann said that because paragraph 12 was not incorporated into the right-of-way agreement, SWEPI did not breach the agreement when it used the pipeline to transport non-native gas. He further added that SWEPI did not breach any obligations by failing to develop additional wells on the property.

In light of the highly undulant nature of the industrys business cycle, this court finds it necessary to construe such failure to develop claims with a hesitant perspective, Brann said.(2)

Moral of the story:ALWAYS run ANY oil and gas contract (or contract of any kind) by a lawyer first!

(1) Harrisburg (PA)Patriot-News(May 6, 2016) No legal remedy when gas driller fails to develop wells as lease outlines: judge

(2)Legal Intelligencer(May 6, 2016) Court Wont Help Landowner Recoup Dreams of Oil-and-Gas Riches

05/11/16 12:23:08PM @josie:

Potter County, PAs First Utica Well Fracked & Flowing

JKLM Energy has successfully drilled and is flowing gas from Potter County, PAs first Utica Shale well.

JKLM is owned by Terry Pegula, Pegulas former company is East Resources. JKLM is Pegulas way of keeping his finger in the Marcellus/Utica pie.

JKLM had signed a lease deal in Potter County (seePotter County, PA Hospital Leases Land to JKLM for Utica Drilling).

There was an unfortunate incident during the drilling process (seeJKLM Energy Accident Contaminates 5 PA Water Wells with SoapandPA DEP Issues Notice of Violation to JKLM Energy for Spilled Soap).

But that got cleared up earlier this year (seeDEP Gives All Clear for JKLM-Contaminated Water Wells in PA).

January results for the Sweden Valley 103 2HU well in Summit Township (Potter County) were 9.2 million cubic feet per day (Mmcf/d) for 24 days. February production was 9.8 Mmcf/d for 29 days.

JKLM has accumulated 100,000+ leasehold acres in Potter County, PA.

JKLM currently has five approved well pads in Potter County: 2 of them are in Summit Township; 2 in Sweden Township; and 1 in Ulysses Township. JKLM has a total of 16 active well permits in place.

The question is no longer, Is the Utica present and commercially viable in north central PA? The question now is, How large is the northern Utica and how prolific will the wells be as exploration continues?

05/18/16 11:23:20AM @josie:

World Longest Utica Well

Nine Energy Service, Inc. (Nine) successfully completed 124 perforated stages in an 18,544 ft. lateral (27,034 ft. TMD) in Guernsey County, Ohio for Eclipse Resources, a premier independent E&P company in the Appalachian Basin.

In one of the most complex wells ever completed by either company, Nines Wireline Division worked directly with Eclipse to design the plug and perf system through Cerebus Well Modeling software (NOV), enabling more effective planning and deployment of cable-conveyed tools. Nine completed all 124 stages in 23.5 days without any non-productive time (NPT).

In the current low commodity environment, operators like Eclipse are targeting their core acreage and remain focused on optimizing development with longer laterals and shorter spacing, said Nick Pottmeyer, VP of Completions Technology, North America for Nine. Longer laterals are proving to be a more effective way to develop acreage. Increased well costs to drill further can be justified by the improved production ranges and return on revenue.

Kyle Bradford, Completions Manager for Eclipse Resources added, Nine was the only wireline company that we considered. We knew with such a technical well, there would be a number of challenges and we needed a partner that we could rely on to execute at the wellsite and who could quickly address any problems.

Ann Fox, Nines President and CEO stated, In a difficult market, the team at Nine continues to prove they can complete the longest laterals with conventional plug and perf, as well as recently designing and stimulating a 50-stage open hole Divert-A-Frac sleeve system in the Williston Basin. We are extremely proud of combining our best-in-class technology with excellent service for the benefit of our customers.

About Nine Energy Service

Nine Energy Service is an oilfield services company that offers completion, wireline and cementing solutions throughout North America. The company brings years of experience with a deep commitment to serving clients with smarter, customized solutions and world-class resources that drive efficiencies. Strategically located throughout the U.S. and Canada, Nine continues to differentiate itself through superior service quality and wellsite execution. Nine is headquartered in Houston, Texas with operating facilities in the Permian, Eagle Ford, Barnett, Bakken, Marcellus, Utica and throughout Canada. For more information about Nine, visit their website at www.nineenergyservice.com.*

*Nine Energy Service, Inc. (May 17, 2016) Nine Energy Completes 124-Stage Well in Utica Shale

05/24/16 11:18:58AM @josie:

Smoking Gun: Copy of the Email that Got John Quigley Fired

It was John Quigleys own hubris that resulted in his demise as Secretary of the Pennsylvania Dept. of Environmental Protection. Last Friday Sec. Quigley suddenly resigned his position (seePA DEP Sec. John Quigley Resigns Over Email Collusion Scandal). Most media reports blame an email scandal as the primary reason for his dismissal. How could Quigley be so stupid as to commit his remarks to an email? Why didnt he just pick up the phone and call his buddies at Big Green radical groups to collude with them? Indeed. If he had, he might still have a job.

Below is a copy of the infamous email Quigley sent to PennFuture, PennEnvironment, and the Natural Resources Defense Council. In the email he drops the f bomb first thingessentially a verbal slap across the faces of his Big Green buddies.

He encourages them, like a Mafioso don, to extract payment for enviro apostacy from Democrats who dare to disagree with him and his radical enviro policiesand to shame Republicans. When you read it, youll know exactly why Quigley was FIRED by Gov. Wolf

As much as cooperative news outlets like PBSStateImpact Pennsylvaniawant to spin this, they cant. Quigley was caught red-handed colluding with radical environmental organizationsand no wonder, hes a radical enviro himself, previously working for PennFuture. Quigleys use of a private email account for official business may be a violation of the lawits certainly an ethics violation.

Heres a copy of the email that shows just how radical this man is, and why he was NEVER qualified to be Secretary of the DEP in the first place:

I think the email says it all, no further commentary needed. Quigley hangs himself

StateImpactdoes their best to paper over Quigleys power-mad attempt to harass elected PA officials, including those in his own party. One thingStateImpactdid uncover is an interesting side story that Wolfs new chief of staff, Mary Isenhour, doesnt like Quigley and that may have played a minor role in his dismissal:

A source close to the administration tellsStateImpact Pennsylvaniathe email was merely the straw that broke the camels back and that Quigleys style had angered people within the administration and the legislature.

I know a number of members have complained about [Quigleys] attitude, says GOP House spokesman Steve Miskin. Obviously his regulatory positions had supporters, but in the end the governor wants to get something everyone can agree to. The governor wants a consensus.

Wolfs chief of staff, Mary Isenhour, personally dislikes Quigley, according to Rep. Greg Vitali (D- Delaware), who is a vocal supporter of green causes.

Isenhour has never been a fan of Quigley and she has never prioritized the environment, says Vitali. Wolf is getting bad advice from others in the administration. [In the email] Quigley was urging interest groups to hold up the governors agenda. You shouldnt be neutral about your own policies.

Wolf spokesman Jeff Sheridan says hes not aware of any bad blood between Isenhour and Quigley.

I dont know anything about any relationship between Mary and the former Secretary, says Sheridan. We thanked him for his service. Given everything bubbling up, he decided to resign.

Vitali says environmentalists are out-numbered in Harrisburg.

Just look at any environmental committee meeting and its chock full of well-heeled, well-dressed men and women who represent the Marcellus Shale industry, he said.

Vitali is worried that the lack of a strong environmental advocate leading DEP will mean the administration back-tracking on key issues. Hes specifically concerned that the updated oil and gas regulations will no longer apply to conventional drillers, who have long-complained they were unfairly lumped in with the newer, Marcellus Shale industry. He says conventional drilling regulations will be used as a bargaining chip in broader, ongoing state budget negotiations with the Republican-led legislature.

Sheridan says thats not the case.*

*Harrisburg & Philadelphia (PA)StateImpact Pennsylvania(May 23, 2016) Heres the email that led to the resignation of Wolfs environmental secretary

Ann Ticopa
06/02/16 11:50:04AM @ann-ticopa:

"Kinder Morgan Projects Receive FERC Authorizations
Kinder Morgan, Inc. (NYSE: KMI) today announced that subsidiaries Elba Liquefaction Company, L.L.C. (ELC) and Southern LNG Company, L.L.C. (SLNG), have received authorization from the Federal Energy Regulatory Commission (FERC) for the Elba Liquefaction Project. The approximate $2 billion project will be constructed and operated at the existing Elba Island LNG Terminal near Savannah, Georgia. As previously announced, the first of 10 liquefaction units is expected to be placed in service in the second quarter of 2018, with the remaining nine units coming online before the end of 2018. This project is supported by a 20-year contract with Shell. ..."


Ann Ticopa
06/07/16 12:07:27PM @ann-ticopa:
"Capital markets day 2016: Re-shaping Shell to create a world class investment case... Go ahead given for new Pennsylvania chemicals development. Chemicals and deep water are now Shells growth priorities ..."http://www.shell.com/media/news-and-media-releases/2016/capital-markets-day-2016.html
06/07/16 02:48:50PM @josie:

Breaking: Shell Pulls the Trigger, PA Ethane Cracker is a Go!

  • Responding to the changing landscape by re-shaping Shell
  • Setting out an agenda for 2020 and beyond: grow free cash flow per share and returns
  • Taking action to manage the down-cycle: delivering on lower costs, lower and more predictable spending, asset sales and profitable new projects
  • BG synergies target updated: expectation to deliver $4.5 billion in 2018
  • Go ahead given for new Pennsylvania chemicals development. Chemicals and deep water are now Shells growth priorities
  • New energies established to develop commercial opportunities in the energy transition
  • Potential for $20-25 billion organic free cash flow and 10% ROACE around end of decade, in a $60 oil price environment

Shell Chief Executive Officer, Ben van Beurden, today provided an update on the companys strategy, that sets a clear course for stronger returns and free cash flow.

Setting his remarks in the context of a volatile industry backdrop, van Beurden said: I see important opportunities for Shell from the substantial and lasting changes underway in the energy sector.

We expect to see robust demand for oil and gas for decades to come, in a global energy system in a long-term transition to lower carbon fuels. As well as low oil prices today, we are seeing higher levels of price volatility, due to geopolitical change, the speed of information flows, and the pace of innovation in our sector.

By capping our capital spending in the period to 2020, investing in compelling projects, driving down costs and selling non-core positions, we can reshape Shell into a more focussed and more resilient company, with better returns and growing free cash flow per share.

All of this is underpinned by an unrelenting focus on safe and environmentally-responsible operational performance, high quality and commercial project execution and prudent financial management of the company.

Turning to the recent acquisition of BG, van Beurden said: The BG deal is an opportunity to accelerate the re-shaping of Shell. Integration is gathering pace, and today we expect to deliver more synergies, and at a faster rate.

We are announcing an increase in expected deal-related synergies, from the $3.5 billion set out in the prospectus, to $4.5 billion on a pre-tax basis in 2018, an increase of some 30%. We expect to achieve and exceed the $3.5 billion synergies prospectus commitment earlier than expected, in 2017, when synergies should be $4 billion. Our other deal-related financial commitments to shareholders in the form of asset sales, debt reduction, and dividends, followed by share buy-backs, are unchanged.

Van Beurden added: With our continued strong focus on returns and growth in free cash flow per share I want to create a world-class investment case for Shell shareholders.

Van Beurden went on to set out Shells portfolio priorities, which have been revised to drive an improvement in returns and free cash flow. Van Beurden defined three categories that play out across different time scales:

Cash engines: conventional oil and gas, integrated gas, oil sands mining, and oil products

* Cash engines are stable businesses, which underpin the financial delivery of the company today. They should have strong and resilient returns and free cash flow, to fund dividends and the balance sheet well into the next decade and beyond.

* We continue to invest in selective growth opportunities in these businesses, at a level that enables positive free cash flow throughout the macro cycle. Through-cycle returns here should be attractive and competitive.

* Integrated gas, which was previously a growth priority for Shell, has reached critical mass following the BG acquisition and planned growth in liquefied natural gas (LNG), particularly in Australia. The pace of new investment will slow here, and integrated gas will now prioritise the generation of free cash flow and returns.

Growth priorities: deep water and chemicals

* Shell has advantaged positions and affordable growth plans here, which should create a pathway to improved returns and material free cash flow from around 2020, as these businesses become new cash engines.

* We give priority to growth projects in these businesses, such that free cash flow may be negative at the lower end of the cycle. Returns should improve over the next 3-5 years.

* Brazil and the Gulf of Mexico represent the best real estate in global deep water. We are developing competitive projects here based on this advantaged acreage. Shells deep-water production could double, to some 900 thousand barrels of oil equivalent per day (kboed) in 2020, compared with 450 kboed in 2015.

* In Chemicals, the company already has brownfield growth projects underway on the US Gulf Coast and in China. Today we are announcing the final investment decision on a new, 1.5 million tonnes per annum (mtpa) cracker and polyethylene plant in Pennsylvania, USA, which will use natural gas from shales production as its feedstock. Once these projects are on stream, early in the next decade, Shells ethylene capacity should reach around 8 mtpa, compared with 6.2 mtpa today.

Future opportunities: shales and new energies

* These businesses are expected to become significant growth priorities for Shell beyond 2020 as we establish clear pathways to profitability. They are themes with material value and upside potential to deliver returns for Shell shareholders.

* Investment here remains relatively low, focused on current positions and identifying potential opportunities. Free cash flow will likely be negative, and returns low, for some time. Capital employed here is constrained until attractive opportunities are developed.

* In shales, Shells restructured portfolio is focused on North America and Argentina, with substantial long-term growth potential.

* In new energies, there is potential for Shell to achieve material scale and profitability. As the energy transition unfolds, we intend to establish a portfolio to build on our established strengths in low-carbon biofuels, hydrogen and smart customer solutions; as well as in solar and wind. Many of these activities complement the companys natural gas strategy today.

Overall, Shells focus is on re-shaping the company. We will retain the most competitive and resilient positions, through targeted investment, and substantial asset sales. This is a value-driven, not time-driven, divestment programme; and an integral element of Shells portfolio improvement plan.

Updating our financial outlook

Following the BG acquisition, and as expected, Shells balance sheet gearing increased to 26% at the end of Q1 2016 from 14% at the end of 2015.

Shells priorities for cash flow, as announced with the BG acquisition, are unchanged: 1) reduce debt, 2) pay dividends, and 3) a balance between capital investment and share buy-backs.

Our free cash flow is being reduced due to low oil prices, and this could continue for some time. In response, Shell is pulling four levers to manage the financial framework in the down-cycle.

* Capital investment will be in the range of $25-$30 billion each year to 2020, as we improve capital efficiency and ensure a more predictable development funnel for new projects. Investment for 2016 is expected to be $29 billion, excluding the purchase price of BG, some 35% lower than the pro-forma Shell-plus-BG level in 2014. In the prevailing low oil price environment we will continue to drive capital spending down towards the bottom end of this range; or even lower if needed. In a higher oil price future we intend to cap our spending at the top end of the range.

* New project start-ups since end-2014 should contribute some $10 billion of annual cash flow by 2018*. Investment delivers new, profitable projects for shareholders.

* Programmes to sustainably reduce operating costs are in place across the company; we expect to reach a run-rate of $40 billion of underlying operating costs at the end of 2016, some 20% lower than the 2014 pro-forma level for Shell-plus-BG with potential for further cost reduction.

* Asset sales, as planned, are expected to be $30 billion for 2016-18. We have earmarked up to 10% of Shells oil and gas production, including 5 to 10 country exits, for disposal. We expect to make significant progress on the first $6-8 billion of this programme in 2016.

As a result of Shells portfolio development and investment, we expect to see an improvement in returns in the next few years, our debt reduced, and significant growth in free cash flow, across a range of oil prices. For example, organic free cash flow could reach $20-$25 billion and return on capital employed some 10% around the end of the decade, assuming $60 oil prices. This compares to 2013-15 averages of $12 billion and 8% with average $90 oil prices.

Van Beurden concluded: Our strategy should lead to a simpler company, with fundamentally advantaged positions, and fundamentally lower capital intensity. Today, we are setting out a transformation of Shell.*

*Royal Dutch Shell (Jun 7, 2016) Capital markets day 2016: Re-shaping Shell to create a world class investment case

06/07/16 02:52:14PM @josie:

IMGs Tiny NatGas-Fired Electric Plants Take Off in the Marcellus

MDN first told you about IMG Midstream in August 2014 (see7 Small Marcellus-Powered Electric Plants Coming to NEPA). At the time, IMG was proposing to build seven tiny natural gas-fired electric plantseach plant producing on the order of 20-22 megawatts of electricity (enough to power 13,000 homes). IMG added a couple of more to their plans in November 2014 (seeDetails on IMGs Tiny Marcellus-Powered Electric Plants in NEPA). The beauty of IMGs tiny natgas electric plants is that they are really smallabout the size of a basketball court; they produce almost no air pollution; and they are quiet. Its a really cool concept. We spotted an update on IMG in the PittsburghTribune-Review. IMGs very first tiny electric plant, in Susquehanna County, PA, went online last October. The second plant, in Bradford County, PA, went online last week. The former 9 planned plants has now ballooned. IMG plans to have 25 plants operating within the next five years!

Ron Kiecana knew several years ago that companies drilling in the Marcellus shale would need more customers in the power sector to use their gas, especially in Pennsylvania where pipelines and export options were limited.

At the same time, he saw a move away from massive power plants to more localized distributed energy resources built around renewables and other smaller sources of electricity.

The company he leads, IMG Midstream, aims to address both needs by building and operating 20-megawatt, gas-fired plants each designed to power about 13,000 homes in the heart of the Marcellus.

These small-scale projects are located close to the source of where natural gas is being produced, said Kiecana, CEO of the company that recently moved its headquarters to the North Shore from Wexford.

Less than four years after its founding, IMG in October brought online its first power plant, called Roundtop Energy, in Auburn, Susquehanna County. Its second plant, Beaver Dam in Bradford County, went into full operation last week, and two more will come online in that county this year.

The company, which is backed by New York private equity firm Bregal Energy, has a goal of doubling its size by the end of 2017 and having 500 megawatts 25 plants installed and running in five years. It has 20 employees at three locations.

Kiecana declined to say how many plants privately held IMG must build to become profitable through sales of electricity to the grid.

Were very lean and very nimble. I think its very important for our business model to stay that way, said Kiecana, who has 24 years in the energy business, most recently working in the renewables space.

IMGs facilities are coming online at a time when gas-fired plants are increasingly seen as a cheaper and more environmentally friendly alternative to coal-fired plants, which are closing because of tighter pollution rules and competition. Natural gas prices this spring hit 17-year lows.

The smaller footprint of IMGs power plants and the companys approach to working with communities help it avoid the opposition and not-in-my-backyard backlash some developers of larger plants have recently faced.

Taking up a 70-by-110-foot space (a little larger than a professional basketball court) on about 5 acres of land, and producing little noise or emissions, each plant has a low environmental impact, which is important to a lot of people when youre doing community outreach and they have concerns, said Joe Broadwater, IMGs vice president for operations and asset management.

Officials in Auburn had no complaints from neighbors or about their dealings with IMG, township Supervisor Dan Trivett said.

They were really good at communicating with us. They invited us down and we toured the whole plant, he said.

IMG officials know they will build in neighboring communities, so a personal touch is important, Kiecana said. Part of being nimble means traveling a lot to see the operations in Northeast Pennsylvania and the people who live nearby, he said.

There was a lot of face-to face, a lot of community meetings explaining what we do, spokeswoman Kristi Gittins. Its easier now that we have one built. You can see it, you can touch it. Theres more of a comfort level.

The power plants themselves are nimble, too, able to power up in six minutes, which helps them operate in the growing niche of distributed energy.

They can come on and off very quickly, as well as respond to load change requests from the grid, Broadwater said.*

Click the link below to finish reading the success story of IMG Midstream.

*Pittsburgh (PA)Tribune-Review(Jun 6, 2016) North Shores IMG Midstream sees growth in power plants using natural gas

06/08/16 01:01:21PM @josie:

First up is the Shell cracker plant press release, issued later in the day yesterday:

Shell Chemical Appalachia LLC (Shell) has taken the final investment decision to build a major petrochemicals complex, comprising an ethylene cracker with polyethylene derivatives unit, near Pittsburgh, Pennsylvania, USA. Main construction will start in approximately 18 months, with commercial production expected to begin early in the next decade.

The complex will use low-cost ethane from shale gas producers in the Marcellus and Utica basins to produce 1.6 million tonnes of polyethylene per year. Polyethylene is used in many products, from food packaging and containers to automotive components.

The facility will be built on the banks of the Ohio River in Potter Township, Beaver County, about 30 miles north-west of Pittsburgh. As a result of its close proximity to gas feedstock, the complex, and its customers, will benefit from shorter and more dependable supply chains, compared to supply from the Gulf Coast. The location is also ideal because more than 70% of North American polyethylene customers are within a 700-mile radius of Pittsburgh.

The project will bring new growth and jobs to the region, with up to 6,000 construction workers involved in building the new facility, and an expected 600 permanent employees when completed.

Shell Chemicals has recently announced final investment decisions to expand alpha olefins production at our Geismar site in Louisiana and, with our partner CNOOC in China, to add a world-scale ethylene cracker with derivative units to our existing complex there, said Graham vant Hoff, Executive Vice President for Royal Dutch Shell plcs global Chemicals business. This third announcement demonstrates the growth of Shell in chemicals and strengthens our competitive advantage. (1)

From thePhiladelphia Inquirer:

The Shell plant will require a daily diet of 105,000 barrels of ethane, one of the family of natural gas liquids including propane and butane that are produced in the wet gas areas of the Marcellus Shale in southwestern Pennsylvania, as well as the Utica Shale in Ohio and West Virginia.

Natural gas liquids like ethane are now being shipped out of the Marcellus by pipelines to plants on the Gulf Coast, Canada, and also to Marcus Hook, where Sunoco Logistics Partners is loading the material on ships for export to European crackers.

Shale-gas producing states have labored to convince manufacturers to build local plants to retain some of value-added production.

The ethane cracker, which breaks down or cracks large molecules into smaller ones, will produce 1.5 million metric tons of ethylene a year. Shell also will build three other manufacturing units to convert the ethylene into polyethylene pellets, a common form of plastic.

Shell would not disclose the projects price. Sasol, a South African petrochemical company, is building a similar-sized cracker in Lake Charles, La., along with six manufacturing units, for $11 billion.

This is so huge, its going to manifest itself in ways we cant envision right now, said David N. Taylor, president of the Pennsylvania Manufacturers Association.

Shell said the plants location within 700 miles of more than 70 percent of North American polyethylene customers was a deciding factor. As the only plant in the east, Shell could have a logistical advantage over Gulf Coast competitors. (2)

There was plenty of accolades at the announcement, from industry, government, and economic development leaders:

The news of Shells decision to build an ethane cracker plant in Beaver County was given a unanimous thumbs-up by business and industry leaders across the region Tuesday.

Shells decision to move forward with this world-class facility, which will put thousands to work across our region through utilizing clean-burning domestic natural gas for decades to come, is welcomed news, especially given the challenging market conditions, said David Spigelmyer, president of Marcellus Shale Coalition, which represents oil and gas exploration and development companies and their supply chain partners working in the Marcellus and Utica shales.

Shell said in a news release the cracker plant, which it projects will be capable of producing 1.6 million tons of polyethylene per year from natural gas sourced from the tri-states Marcellus and Utica shales, will now become a priority.

The plant will be one of the largest of its kind in North America the largest single from-the-ground-up industrial investment in the Pittsburgh region in a generation and the first major U.S. project of its type to be built outside the Gulf Coast region in 20 years, said Dennis Yablonsky, chief executive officer of Allegheny Conference on Community Development.

Shell said the project will need as many as 6,000 construction workers to build the facility, which will employ 600 permanent workers when completed, which should be early in the next decade.

Many officials looked beyond the building phase to who would use the output of the cracker.

Both Spigelmyer and Yablonsky said the announcement bodes well for the future of the manufacturing industry in the region.

This investment also reflects the fact that domestic manufacturings potential is near limitless thanks to our abundant and stable energy supplies from natural gas, Spigelmyer said.

We believe that a capital investment of this magnitude indicates to other companies in the energy, petrochemical and plastics industries that Southwestern Pennsylvania should be on their short list of locations for new facilities and expansions, said Yablonsky.

While production from the plant is several years away, at least one industrial park was already swinging into action.

Were anticipating that were going to get a lot of people who will be making things from the feedstock produced by the cracker plant, said Dan Reitz, executive director of Washington County Council on Economic Development, which is in charge of Starpointe Business Park. Starpointe, just outside of Burgettstown, is about 20 miles from Monaca.

Our broker is already contacting companies that dont have operations here, Reitz said.

Robbie Matesic, executive director of Greene County Department of Economic Development, said while Greene County will be a contributor of some of the natural gas to the cracker, there will be other important offshoots.

Its in the supply chain that the opportunities lie, she said, noting services and equipment will be needed not only for the maintenance and operation of the cracker plant itself, but also for the other industries that may develop in the area to take advantage of its product.

It will be a good opportunity to continue our efforts to diversify our economy, Matesic said.

We are going to see tremendous investment in the area, and Don Chappel (executive director of Greene County Industrial Developments Inc.) and I are working to try to capture some of that investment, she said.

Washington County Chamber President Jeff Kotula said Shells decision to build the cracker plant is the logical extension of a vision the county had when it declared itself an energy center for the Marcellus Shale gas-drilling activity nearly a decade ago. At the time, the county designated itself The Energy Capital of the East, but Tuesday, Kotula took it a step further.

(Shells decision) fulfills the vision of Southwestern Pennsylvania as a true center for energy in the world, he said.

I consider it to be the most important economic development since the advent of the Marcellus, said Pat McCune, president and chief executive officer of Community Bank, who also was a founder of the Tri-State Oil & Gas Expo in the early days of the Marcellus. This is going to cement Pittsburgh as a petrochemical destination with all of the commensurate services related to that. I think it will have a near-immediate impact, and the local business community will do well, including banks. (3)

The people in Ohio, where they want to get their own cracker, have taken note. Contrary to what you may think, Ohio says Shells PA cracker means it makes their own crackerto be built by Thailand-based PTT Global Chemcialall the more likely to get built:

Shawn Bennett, executive vice president of the Ohio Oil and Gas Association, a statewide trade group, called Shells announcement phenomenal news.

It will create a new petrochemical industry in the three-state Appalachian Basin and its impacts on Ohios chemical and plastics industries will be very substantial and very significant, he said.

Shells news is the announcement weve been waiting for, he said.

Shells decision also makes it far more likely that Thai chemical company PTT Global Chemical will build its $5.7 billion cracker plant in Ohios Belmont County, said Andrew Thomas, executive in residence at the Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs at Cleveland State University and an expert on the Utica Shale.

That company is looking at a site of an old coal-fired power plant at Shadyside with a final decision expected late this year or early next year.

It is easier to operate two cracker plants in the same region because two plants offer operating efficiencies for cracker operators when pipelines or plant operations go down, he said. It is easier to run two than one, he said. (4)

(1) Shell (Jun 7, 2016) Shell Takes Final Investment Decision To Build A New Petrochemicals Complex In Pennsylvania, US

(2)Philadelphia(PA)Inquirer(Jun 8, 2016) Shell gives green light to giant Pennsylvania ethane cracker plant

(3) Washington (PA)Observer-Reporter(Jun 7, 2016) Business leaders see broad impact from Shell cracker decision

(4) Akron (OH)Beacon Journal(Jun 7, 2016) Shells $6 billion ethane cracker in western Pennsylvania will also impact Ohio, West Virginia

06/09/16 04:36:20PM @josie:

New $2.5 Million Penn State Initiative May Aim to Stop Pipelines

This is the story of wasting $2.5 million of taxpayers money. Penn State has given us some of the best research (and personnel) weve ever seen when it comes to the Marcellus Shale. In particular I'm thinking of Penn StatesMarcellus Center for Outreach and Research(MCOR).

Great people. Super research.

But then there are others at Penn State who dont like shale energy and concoct some pretty creative ways to stop it. I recently came across something calledMarcellus by Designfrom Penn States Department of Landscape Architecture.

This new initiative from Penn State received $2.5 million from the National Science Foundation (funded by your tax dollars and mine) to travel around the state and use a website to educate people about the aesthetics of the Marcellus. In other words, where should you put a pipeline? And how will it look? Theyve designed online games to help in this mission.

Yes, its as stupid as it sounds. The aim is, of course, to not install a pipeline at all. Its an elaborate anti-drilling hoax cloaked to look like something it is not. After a pipeline is in the ground for a few years, you cant even tell its there. We think the $2.5 million grant would have been better spent on where to site windmills in PA.

Travel through northeast and southeast PA.(going down the PA Turnpike from Wilkes-Barre to Philadelphia, for example) to spot entire hillsides covered with ugly, imposing windmillsdestroying the natural beauty of the areanot to mention being huge bird killers. Why didnt the Dept. of Landscape Architecture study that, instead of Marcellus pipelines?

A new website is giving people in rural Pennsylvania and beyond high-tech tools to learn about Marcellus Shale gas development in their backyards.

The website, Marcellus by Design, introduces some of the complex issues surrounding the industrys development, and through interactive games and other resources, shows that communities can play a role in the process.

Penn State researchers will take the new technology to rural communities across the state this summer as part of Marcellus Matters: Engaging Adults in Science and Energy, a larger project that seeks to boost scientific literacy among adults.

Our whole project is geared toward giving community members the knowledge they need to understand they can have impacts within their communities as far as development issues, said Terry Noll, project coordinator and a researcher in Penn States Earth and Environmental Systems Institute.

Noll and her team have crisscrossed the state hosting discussions, lessons and field trips since the project started in 2012 with a $2.5 million grant from the National Science Foundation.

Now, with the website, they can reach more people than ever.

We wanted to create a digital record, said Timothy Murtha, a Penn State landscape architecture professor and a member of the Marcellus Matters project. There are communities in Pennsylvania we havent had a chance to work with, or other places in the U.S., that can look at the planning that took place and some of the creative ideas our students had.

The website, developed by Murtha and Brian Orland, a former Penn State professor now at the University of Georgia, is based partly on the work of Penn State landscape architecture students.

Their work seeks to show communities the environmental, economic, sociological and aesthetic factors that go into planning for energy development, and how to weigh these issues and make informed decisions about their land.

We engaged in a series of design studies in landscape architecture and asked students to engage communities about things they found to be important in their landscape in the context of change, Murtha said. The students developed broad master planning ideas like how to reconcile wonders like the Pennsylvania Wilds and the energy industrys need for natural gas extraction.

Based on these conversations, the students created detailed story maps that examine how Marcellus development affected specific communities. The stories examine how development affects everything from tourism to water quality.

Also included on the website are interactive games, a history of energy industries in Pennsylvania, and interviews with diverse stakeholders in natural gas development, like well workers, environmental advocates and county planners.

For us, it was how to get as much information from as many stakeholders as possible and bring it together and illustrate it to the community, Murtha said. Landscape planning is more than where to put a wellhead. There are lots of factors.

Noll said people who attend her workshops are often surprised by how many variables there are when making landscape decisions about gas development. The website, with its interactive games and other resources, are a good start to putting the puzzle together, she said.

I dont think people understand that communities can state their desires, Noll said. They can work with gas companies to find whats hopefully beneficial to both parties. We want them to understand that they can provide input during the process.*

*Penn State News(Jun 7, 2016) New website explores impacts of Marcellus gas development

Ann Ticopa
06/09/16 07:42:18PM @ann-ticopa:

What MDN says about MCOR:
"Penn State has given us some of the best research (and personnel) weve ever seen when it comes to the Marcellus Shale. In particular were thinking of Penn States Marcellus Center for Outreach and Research (MCOR). Great people. Super research."

What MDN says about Marcellus by Design:
"Yes, its as stupid as it sounds. The aim is, of course, to not install a pipeline at all. Its an elaborate anti-drilling hoax cloaked to look like something it is not. "

Yet, on their home page, MCOR features a Marcellus by Design News Release summarizing the project and listing their scheduled workshops.

06/09/16 07:53:20PM @josie:

What is you point?

Ann Ticopa
06/09/16 08:39:44PM @ann-ticopa:

The inconsistency.

06/18/16 12:46:39PM @josie:

06/19/16 10:23:06PM @josie:

Is this good news for Kennedy?

06/20/16 04:53:38PM @josie:

Price of Natural Gas

Brian Day
07/10/16 05:43:54PM @brian-day:

I have posted a discussion on the general discussion forum of this site that was meant for the Tioga portion only. I commented to that effect, but the discussion has not been moved to here. If you are interested it is on the General discussion page.

07/10/16 07:25:47PM @josie:
where is the general discussion forum
Brian Day
07/10/16 08:59:56PM @brian-day:

Go to the top of this page and hit the GoMarcellusShale at the very top. My post is the fifth one down at this time.

07/21/16 11:31:08AM @josie:

Very quiet here for months

07/21/16 12:29:52PM @josie:

Stormwater permits are a good indication of new pad construction and future well drilling. They need a stormwater permit for any excavation work that needs to be done. Its also a good indication of new pipeline work. Many times drillers record a stormwater permit before they record a well drilling permit.

N Bohl2
07/28/16 10:04:26PM @n-bohl2:

The new State map is really helpful looking at Tioga County now. I had been paying attention to permitting the last year and it seemed to me like a lot of townships were involved. So I looked at the most recent production results that have been filed to see what townships were doing what. I was a little surprised to see the following --

Of the top 25 producing wells in Tioga County for May 2016 Osceola Township had the greatest producer and 18 of the top 25 wells are SWEPI wells. 11 of Tioga Counties 29 Townships are in the top 25.

2 in Osceola , 5 in Richmond, 1 in Shippen, 2 in Delmar, 5 in Sullivan, 2 in Middlebury, 1 in Charleston, 1 in Hamilton, 2 in Duncan, 3 in Blossburg and 1 in Bloss.

I only post this because the results of the new wells looked promising I thought. I also noticed that you can begin to see what the depletion rate might be with some of these Utica wells and you can see this quite easily using the new mapping system.

07/28/16 11:55:45PM @josie:

Good info, thanks and please keep it coming

08/02/16 11:28:26AM @josie:

Kennedy Well:

There are new yellow (gas?) and blue (water?) flags and paint on the ground from the pipeline ROW at Callahan Rd back down to the well site....a Storm water permit was issued 7/12

08/08/16 06:00:55AM @paleface:

Shell is in production mode in Tioga co. 3 rigs will be drilling.

08/08/16 04:30:16PM @josie:

Any ideas about where and when?

I do not think there are any current well permits that are not already been or are being drilled at this point. In other words there are no active drill permits that are not being drilled.

08/19/16 12:30:46PM @josie:

Tioga County, PA Landowners Wont Let Driller Clean Up

WILLIAMSPORT A natural gas company operating in the Marcellus Shale region has filed a federal lawsuit claiming owners of a Tioga County property will not let it restore their property.

SWEPI, a partnership consisting of Shell Energy Holding and Shell U.S. E&P Investments, contends Damon and Kendra Baker will not permit access to their Deerfield Township property so it can be restored as required by the state Department of Environmental Protection.

According to the complaint filed Wednesday in U.S. Middle District Court, the five-year lease the Bakers signed in August 2006 to allow drilling included the requirement that all unnecessary equipment would be removed and the property restored.

SWEPI constructed a pad on the parcel in late 2010 but no wells were drilled. When the lease expired on Aug. 26, 2011, SWEPI claims it had an obligation to reclaim all disturbed lands. It estimates the cost to be at least $130,000.

Negotiations for a new lease failed because Damon Baker demanded a bonus payment well above market rate, SWEPI claims.

It says its final offer was $150,000 while the Bakers wanted $510,000 in total compensation.

In December 2014, SWEPI says it entered a consent agreement with DEP outlining what needed to be done to restore several properties, including the Bakers.

Failing to complete the work in a timely manner could result in a $500-a-day civil penalty for each well site, it says.

SWEPI said DEP has extended the deadline for completion of the Baker site restoration until Dec. 31 but has said there will be no further extensions.

By prohibiting access, SWEPI contends the Bakers have violated terms of their lease. It is seeking an injunction to gain access and to prevent the Bakers from interfering with the restoration work.


Bakers own 59.27 acres in Deerfield Township and the Swepi offer to lease was $2500 per acre

Ownership Parcels

Parcel ID (PIN) 08-04.00-043
Calculated Acres 59.27
Control Number 3738
Vision PID 4369
Property Classification A
Land Use Classification 112.00
School District NORTHERN TIOGA
Acres Per Deed 59.60
Grantee (Owner) BAKER DAMON & KENDA

Matt Lanctot
08/31/16 04:09:57PM @matt-lanctot:

I've seen royalty statements with upwards of 75% deductions, sadly. take a lower royalty % if you have to, but definitely have a gross "no-deduction" lease.

Lynn Wigglesworth
09/15/16 12:26:09PM @lynn-wigglesworth:

That's interesting. Maybe SWEPI has decided to concentrate on some areas of Tioga Co. and let other areas go?

N Bohl2
09/15/16 08:20:29PM @n-bohl2:

I could not access the details but it looks like this involves Marcellus only? Parts of Morris and Duncan twp.s in Southern Tioga and also Northern Lycoming Co. 2nd map is of Nelson, Lawrence, Tioga, Farmington twps?

Jack Young
09/15/16 10:12:04PM @jack-young:

These lease sales involve all depths -each is anon-core areas where Shell's lease position wasn't very strong and the geology is unproven. Anyone who buys this acreage will need to do a good bit of additional leasing to make the prospect viable, which is probably good news for the folks there. So I'd say this is a positive development.

09/15/16 10:15:57PM @josie:

Anyone know if there is anything in Delmar Township listed in the auction?

Jack Young
09/16/16 12:06:27PM @jack-young:

No - the three packages being offered have nothing in northwestern or central Tioga County. Shell is keeping Delmar Township as far as I know.

09/16/16 12:09:36PM @josie:

Thank you Jack

Lynn Wigglesworth
09/19/16 10:40:10AM @lynn-wigglesworth:

Josie; On Saturday I got a letter asking me to call to arrange water testing because SWEPI will be drilling near my property. I called this morning and the testing company confirmed that the drilling will be at the Kennedy well. As far as I know, I'm still not in the unit, unless they included me and didn't tell me. Does anyone know how to find out if you are in a unit?

09/19/16 10:50:19AM @josie:

Great news Lynn, I heard the same rumor over the weekend. When Swepi gets the permits to drill they will need to notify all property owners of any adjustment they are making to the unit size. I do not think you are in that unit yet.

09/22/16 11:56:50AM @josie:

Where is swepi drilling now? The last I knew they were at Willard and Lanny Gee's place. Any news?

09/22/16 12:37:10PM @josie:

They are in the process of testing wells around kennedy. They will increase until size to accommodate the number of wells and well length. They have paved Callahan Rd to the road into the pad and have cleaned the pad site off from brush and grass.

09/22/16 07:17:25PM @gringo:

Rig just left Wood 513 in Rutland a couple of days ago. Willard got scraped for now. The rig might have went to Harer, in Liberty.
As far as Kennedy the Landowner with the well pad will have seen a copy of proposed unit, also township will get a copy otherwise the amended Declaration normally will not be filed until just prior to first production payments go out.

09/22/16 07:28:31PM @josie:

Thank you. What happened at Willard, any idea?

Ann Ticopa
09/23/16 03:14:41AM @ann-ticopa:

I wonder if the auction terms include use of SWEPI's already installed gathering system lines in Jackson and Rutland Twps. Would save the pruchaser from having to make that capital investment, and be extra income for SWEPI.

Theresa Kolk
09/23/16 05:43:23AM @theresa-kolk:

a neighbor told me they saw a rig, think it was at the Lepley site in Liberty Twp. Know they have had a lot of "paper" activity recently...also a lot of paper updates on Connolly, which is nearby....

09/23/16 05:06:16PM @gringo:

Swepi Rig going up at Tice Pad, Richmond Township.

Ann Ticopa
09/24/16 01:32:38PM @ann-ticopa:

Why is Shell attempting to sell only ~1% of their Marcellus leases? What factors did they consider in deciding what to list?

10/02/16 02:41:41PM @josie:
The Kennedy vertical well IS BEING FLARED AS I WRITE THIS....
They have also installed sediment/erosion barriers around the site; actually, an area much larger than the current well site.....

10/03/16 11:48:20AM @josie:

Kennedy 137 Flare Oct 2, 2016

10/04/16 06:31:45AM @paleface:

That flare looks rich inwet gas.Sunset colors.

Ann Ticopa
10/04/16 01:03:14PM @ann-ticopa:

Are you aware that the DEP appears to have two different records for a Kennedy well? Kennedy 137D and Kennedy 137.

10/04/16 01:45:55PM @josie:

Attached is the original well plat map 137D

Ann Ticopa
10/04/16 02:50:12PM @ann-ticopa:

OK, just so you know the permit/inspection history may be in in two different places.





10/04/16 03:43:10PM @josie:

Wonder why?

10/04/16 04:01:23PM @josie:

According to the State:

Gasiewski, Matthew

9:57 AM (1 minute ago)

One is the well pad and the other is the actual well itself.



Matthew Gasiewski| Business Analyst 2
Department of Environmental Protection | Bureau of Information Technology
Rachel Carson State Office Building
400 Market Street |Harrisburg, PA 17101

Lynn Wigglesworth
01/03/17 09:35:43AM @lynn-wigglesworth:

Wasn't this an active thread a couple of days ago? Now I see nothing more recent than 10/04/16. Posts seem to oddly come and go on this site!

Keith Mauck
01/03/17 09:40:00AM @keith-mauck:

They weren't posts relating to any activity or info...

01/03/17 11:55:31AM @josie:

It can be active again once things get straightened out Lynn. The thread that has been a little active is over at 



01/03/17 06:57:43PM @josie:

Anyone know where Ensign 162 is drilling and when it will be done there?

01/19/18 06:47:59PM @josie:

Anyone want to share what they are paying for natural at the meter at your house/residence to heat with and most of all who the supplier is?

01/23/18 07:07:00PM @josie:
Do You Have a Production Reporting Problem?

If you track the production of your well(s) at the PADEP reporting site, do you notice a difference between the production reported there by swepi and the production amount shown on your royalty statement? 

We have a 'no deductions' clause in our addendum, but the difference in the two amounts has varied from 2.4% to 4.4%, with the royalty production amount always being lower than the PADEP amount. I am always being paid on less production than what is reported by swepi at  the PADEP

Anyone else see this? Can anyone explain why?




    Example: Meriweather 35 H 001

Forecasting royalties, income and production for your wells.
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